【正文】 be merged into 3 groups: Air China。 2023 Deloitte Consulting 11Foreign investments have been concentrated along the coastal regions of China, particularly in the economic zones of the Yangtze River Delta (YRD) and the Pearl River Delta (PRD)0 – 100100 – 300300 – 500500 – 1,0001,000 – 2,0002,000 – 4,0004,000 – 5,00010,000FDI Total Value(US$ million)Year 2023 Foreign Direct Investment (FDI) by ProvinceHeilongjiangJilinLiaoningHebeiBeijingTianjinInner MongoliaShandongJiangsuShanghaiZhejiangFujianGuangdongGuangxiHainanHunan JiangxiAnhuiHubeiHenanGuizhouYunnanSichuanChongqingGansuNingxiaShaanxiShanxiQinghaiXinjiangTibetEconomic Environment FDI169。 2023 Deloitte Consulting 14In the foreseeable future, China is expected to emerge as a trading powerhouse, and being a major demand driver for the rest of AsiaImportsUS$ billionsSource: 5year forecast, EIUChina is forecasted to catch up to Japan in terms of imports volume by the year of 2023yearEconomic Environment International Trade169。 WACHoviaNote: (*) calculation, Price in local currency/US BigMac price/Actual exchange rate1Over/Under Valuation against the dollar, %*BigMac IndexThe probability of RMB revaluation in the near term is rather low, as….?China economy is hardly overheating at present, given the CPI inflation rate is only %?Economic policies in China are geared toward fostering conditions that will prevent a rapid rise in the ranks of the unemployed, which could lead to social instability。 Oxford Analytica Category Current Rate Future RateAgricultural % 17%Car 80% 25% (parts, 10%)Woods / Paper 1218% / 1015% %Chemical N/A %HighTech (Incl. Semiconductor ) N/A 0%Category Barrier ActionsImports? Quota? Licensing? Registration requirements? Commodity inspection ? Quarantine rules ? Ban quotas and other quantitative restriction ? Phase out all quotas on products, by 2023, with an annual reduce rate of 15%? License exemption for exportoriented productionExports ? Rebate ? Average tax rebate rate of %, taking effect at the beginning of 2023China is Expected to Eliminate its Nontariff BarriersChina Will Cut Down its Tariff RateInternal serviceBankingDistribution, retailInsurance SecuritiesEnergyAuto Pharmaceuticals Tele servicesProcessed foods, consumer goodsElectrical equipment, electronics Current degree of protectionism Effects of WTO membership High Low Dramatic Negligible Sector protectionism and effects of WTOEconomic Environment WTOAgriculture agribusinessExcludes liquor and tobacco industries, which have historically been highly controlled and will likely continue to be.Source: United States–China Business Council。 2023 Deloitte Consulting 19China is being increasingly more integrated into the world munity? Shanghai Cooperation Organization (SCO) Meeting June 2023Shanghai hosted a meeting with the leaders of Russia, Kazakhstan, Kirghizstan, Tajikistan, Uzbekistan, aiming at reaching regional security and stability via cooperation.? 2023 Beijing Olympic Games June 13th, 2023The International Olympic Committee picked Beijing over Paris, Toronto, Istanbul and Osaka to host 2023 Olympic Games, which made a new step in World and China sports history. ? APEC Summit October 13th, 2023APEC (AsiaPacific Economic Cooperation ) summit was successfully hosted in Shanghai. Leaders of APEC 21 economies had an indepth exchange of views on the current macroeconomic situation of Asia Pacific region ? WTO December 11th, 2023With 15year’s effort, China became the 143rd member of the World Trade Organisation (WTO), the global trade group. From when, China is going to take a more active role in international trade? ASEAN Summit July 2023China attended the 35th ASEAN (Association of Southeast Asian Nations) Ministerial Meeting in the Brunei, during which China, together with other countries, discussed the issues on regional economic cooperation, recovery and reform as well as antiterrorism.? 2023 Shanghai World Expo December, 2023The 132nd General Assembly of the Bureau of International Expositions granted the 2023 World Expo to Shanghai China Has Participated in A Number of International Activities RecentlySocial Political Environment Major Activities169。s western region is the biggest move aimed at shrinking the affluence gapIne Distribution is Being WiderEastMiddleWestEastern People Make Much More MoneySource: China Statistics Year BookNote: 1US$= yuan (current)Social Political Environment Ine disparity169。 these problems disable them from seeking a job again?Government plays limited roles in building up the social welfare system, corporations are expected to fill up the remaining gapSource: The Economist Intelligence Unit (EIU)Hidden unemployment rate is estimated to be over 10%ActualForecastSocial Political Environment Unemployment169。 CDI analysis (crossborder transaction only)China MA deals are on the rise, especially with privately held paniesExamples of recent MA dealsBuyer Seller Industry Value (USD m)Huaneng Power Int Shandong Huaneng Power Electric power 1,450Emerson Electric Avansys Power, owned byHuawei TechnologiesPower Systems 750Flextronic Int NatSteel Broadway Manufacturing 364Alcatel Shanghai Bell Tele 300Li Fung Colby Group Holdings Trading 282CCT Multimedia Haier Group Tele 185Source: CDI ChinaCommercial Environment MAGrowth rate of MA value in Mainland China Now is the ideal time for MA in China? China has a vast appetite for capital especially the privately owned panies, where most of MA deals are on the rise–China’s banks continue to primarily allocate funds to the largely inefficient SOEs–The stock markets as an alternative funding source to ba