China’s transition from an investment- and export-led growth model to one driven by consumption and innovation has led to the emergence of a two-track economy. The first track, in basic manufacturing and traditional industries, is experiencing significant headwinds, while the second, in services, advanced manufacturing and consumer markets is exhibiting strong growth potential.

The Chinese government introduced a number of major policy initiatives in 2015 to facilitate the country’s economic transformation. These initiatives place importance on the quality of growth in order to achieve a more balanced level of development that is conducive to long-term prosperity. This is expected to continue to be a feature of China’s policies over the next few years, especially following the release of the 13th Five-Year Plan in March 2016, benefitting foreign companies investing in China and Chinese companies investing overseas.