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Cautious optimism about 2017

China Daily | Updated: 2017-01-19 07:45

Cautious optimism about 2017

Neil Harvey, CEO, Credit Suisse, Greater China.

A1 We think China is likely to maintain its GDP growth rate above 6.5 percent. The main opportunities will likely come from recovery in export growth and growth in infrastructure investment. There could be challenges. And there is the risk of capital outflow in light of US interest rate hikes and the renminbi's depreciation, though we think this will be managed by the People's Bank Of China. The US president-elect remains a source of uncertainty. His departure from traditional practices in terms of US foreign policy could create surprises.

A2 As the government seeks innovation in financial markets, Credit Suisse will bring our product expertise in hybrid instruments, high-yield bonds, derivatives and other innovative financial products to China.

We will continue to expand our onshore presence and enhance our capability in acting as a bridge in bringing international capital to help fund China's growth and financial market innovation. As China moves with the internationalization of the renminbi, we will leverage our global network to facilitate the move.

A3 As Chinese companies play a role in the growth of the Asia Pacific region, we expect to see demand for financing and advisory services from our Chinese ultra-high net worth individual and entrepreneur clients. We will continue to invest in our onshore China franchise in order to serve this client base.

In November 2016, we launched our domestic A-share brokerage business. With the contribution from this business and our efforts to expand our private banking capability, we expect revenue and profit contribution to rise in the medium to long term.

A4 We have seen a mixed impact on client activity in the region as a result of a strong dollar and more flexible renminbi. Some clients have been diversifying out of local currencies and buying US dollar assets. We expect the Shenzhen and Shanghai-Hong Kong Stock Connect links to become more active as Chinese mainland investors diversify their portfolios into HK dollar assets. Some clients have become more cautious as borrowing costs increase.

Overall, we expect to grow our business as clients look for more ways to manage their liquidity, raise capital and hedge financial risks amid market and currency volatility.

A5 We will continue to expand our onshore capability through hiring talent and working with local partners. Most recently, we hired Rick Meng, head of private banking for Credit Suisse in China, to build an onshore wealth management team.

We believe our ability to provide expertise and onshore access to the domestic capital markets in China differentiates us from our international peers. We aim to offer our clients an integrated onshore and offshore offering that combines our private banking and investment banking product expertise.

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