Request a demo    05 February 2018 FROM THE CEO OF EMIS Amidst a generally positive outlook for emerging markets, there persists one cloud on the horizon that could slow economic progress. The issue of public debt, particularly in China, has been noted as a risk for some time now. Of course, global debt rose substantially in the wake of the financial crisis as developed markets sought to shore up their economies. But it has hit an extremely high level in China where debt levels have increased from 175% to nearly 300% of GDP in the last decade. The Chinese government has moved to alleviate the risk with a deleveraging effort that includes tighter central bank policies, new regulations for the shadow banking sector and closer control of risky local government lending. The effect has been to shift the debt burden from the corporate sector to households where debt has risen to nearly 50% of GDP. In turn, the government has turned its attention to housing policy in an effort to reign in consumer debt levels. Overall, these policy initiatives appear to offer comfort that the risk of a hard landing for the Chinese economy remains relatively small. At the recent Davos meeting, a senior advisor to President Xi affirmed the government’s plan to bring debt under control within three years. While the plan was short on detail, it shows that the Chinese government clearly takes the threat seriously and intends to take the necessary decisions to mitigate it – even if that comes at the expense of reducing growth expectations. Guy Dunn P.S. Here are a few articles on the debt issue from EMIS last week. RISKS INVOLVED IN CHINA'S “MESSY" FINANCIAL SYSTEM, CAUTIONS BEIJING OFFICIAL According to a former Chinese finance minister, China's financial system could face a higher level of risk than was seen in the U.S. before the global crash.    Read more    BRAZILIAN COMPANIES' DEFAULT RATE DROPS BY 6.5% AND A POSITIVE FORECAST According to Boa Vista SCPC (a Brazilian company specialised in credit rating), Brazilian companies' default rate has dropped all over the country by 6.5% in 2017 in comparison to 2016.    Read more    FITCH: HIGH GOVT DEBT BURDEN HOLDS BACK INDIA'S RATING A day after Finance Minister Arun Jaitley projected a fiscal deficit of 3.5% of GDP against the earlier target of 3.2 per cent, Fitch Ratings on Friday said the government’s high debt burden holds back India’s rating upgrade.    Read more    INFOGRAPHIC OF THE WEEK EMERGING EUROPE M&A TOP DEALS IN 2017 2017 top M&A, Private Equity and Real Estate deals, ranked by deal value.    Click to view it full screen    CEIC DATA POINT OF THE WEEK CEIC Data is a sister company of EMIS and part of the Euromoney Data Division UK CONSTRUCTION The UK Construction industry appears to have strengthened over the past 5 years. There are two main industries however that haven’t fared quite as well as the rest.    Click to view it full screen    WEEKLY NEWS SUMMARY Below are the most read articles in the past week on EMIS Perspectives, our daily blog of emerging market news and insights.     ASIA     INDIA RANKS THIRD IN THE GLOBAL TRUST INDEX India remains among the top three nations where trust in government remains high, Times of India has reported citing data from Edelman’s Global Trust index rating.     Read more    GLOBAL TRADE BOOSTS THE USE OF CHINESE RENMINBI Bankers and experts are confident that the yuan will play an important role in global trade, investment and foreign reserves, China Daily has reported citing the 2017 survey conducted by the Bank of China.    Read more    THAILAND’S LARGEST PETROCHEMICAL FIRM TO SEAL A US JOINT VENTURE WITH SOUTH KOREA’S DAELIM GROUP Stock Exchange of Thailand-listed PTT Global Chemical Plc (PTTGC), Thailand’s largest petrochemical maker by capacity, is set to sign the head of agreement (HOA) with South Korea’s Daelim Group.    Read more                  LATIN AMERICA               BRAZIL: IPO OF CODEMIG TO RAISE BRL 3BN State-owned economic development company Codemig is preparing its IPO (initial public offering), which may raise approximately BRL 3bn.    Read more    VALUE OF CONSTRUCTION IN MEXICO DOWN 2.2% Y/Y IN JAN-NOV The value of construction project in Mexico fell 2.2% year-on-year to USD 9.62bn between January and November 2017, M-Brain News Monitoring reported.     Read more    IMF HIKES 2018 GROWTH FORECAST TO 3% FOR CHILE The International Monetary Fund (IMF) has raised its growth forecast for Chile’s economy in 2018 from 2.5% to 3%, CEEMarketWatch reported.     Read more         EMERGING EUROPE      TURKEY'S TOURISM REVENUE JUMPS 18.9% Y/Y IN 2017 Turkey saw its tourism revenue jump by 18.9% on an annual basis to USD 26.3 billion for 2017, Anadolu Agency reported referring to data revealed by the Turkish Statistical Institute (TurkStat).     Read more    NUMBER OF INSOLVENCIES IN ROMANIA RISES 8.7% Y/Y IN 2017 The number of insolvencies in Romania rose by 8.7% on an annual basis to 9,102 for 2017, CEEMarketWatch reported citing data revealed by the National Trade Registry (ONRC).     Read more    SBERBANK NEGOTIATES WITH UAE INVESTORS ON SALE OF TURKISH DENIZBANK Sberbank has been negotiating with some investors from the UAE on the possible sale of Turkish Denizbank, Prime reported citing Bloomberg sources.     Read more              MIDDLE EAST & AFRICA           SOME GCC STATES MAY DOUBLE VAT TO 10% - STUDY Some of the Gulf Cooperation Council (GCC) states may double VAT to 10% mainly because of discrepancy between 5% statutory and effective tax rate, Trends reported referring to a study conducted by S&P.     Read more    SPAR PLANS TO OPEN 40 STORES IN SAUDI ARABIA BY 2020 Amsterdam-based food retail chain Spar International plans to open 40 stores in Saudi Arabia by 2020 and eight of them are due to be running by the end of 2018.     Read more    TURKISH FIRMS INTERESTED IN JVS I Turkish firms are interested in forming joint ventures (JV) with Qatari groups, Anadolu Agency reported as Turkish businessmen met with officials of Qatar Chamber on January 28 to discuss potential steps in the field.    Read more    ABOUT EMIS EMIS operates in and reports on countries where high reward goes hand-in-hand with high risk. We bring you time-sensitive, hard-to-get, relevant news, research and analytical data, peer comparisons and more for over 120 emerging markets.     Read more    EMIS CHARTING TOOL EMIS CHARTS uses selected data points from the subscription-based EMIS service, to provide you with an interactive overview of sectors, key players and macroeconomic trends across 120+ emerging markets and allows you to create your own charts.     Try it out now    EMIS IN NUMBERS 125 countries  2M+  companies  58,000 articles per day 235 million searchable archive  250 industries  EMIS VIDEO SIGN IN HERE Copyright © 2018 EMIS, all rights reserved.