Embed Size (px)
Citation preview
2016 年 9 月 12 日
亚洲经济分析
研究报告
中国可以从日本的经历中汲取哪些经验(第一部分)：探究两国异同(摘要)
我们在本报告中分析了中日经济的相似与不同之处。我们将在随后的报告中重点探讨日本的不良贷款问题及应对政策，以总结中国可能习得的经验教训。 1. 相似之处
90 年代初日本从人口红利期步入人口负担期，中国也已在 2010年前后迎来这一转变；此后长期经济增速有所下滑。
股市估值在人口红利达到峰值前夕触顶。 出口是高速增长期的重要引擎。在经济朝内需拉动转型前，本币
显著升值。在中国，从投资驱动型向消费驱动型的经济转型才刚刚开始，而日本在上世纪 70 年代初就经历了这一幕。
中国正在开展的金融市场化进程与日本颇为相似，只是滞后了20-30 年。
中国过去几年的企业负债与 GDP 之比与日本 90 年代初的水平相当。
2. 不同之处
自从日本步入人口负担期以来，日本的全球经济地位迅速下滑，而中国的全球地位仍在攀升。
中国的人均 GDP 和当前的资本设备率只相当于日本 80 年代末的水平，而城镇化率和人力资本水平仅达到了日本 50、60 年代的水平。
中国正在积极引入外国资本。 近期中国的私营领域债务积累速度快于日本 80 年代末的水平。
与此同时，中国政府负债与 GDP 之比明显偏低，而且政府债务的积累速度要温和得多。 *全文翻译随后提供
Naohiko Baba +81 (3) 6437-9960 | [email protected] Goldman Sachs Japan Co., Ltd. Tomohiro Ota +81 (3) 6437-9984 | [email protected] Goldman Sachs Japan Co., Ltd.
Andrew Tilton +852-2978-1802 [email protected] 高盛（亚洲）有限责任公司
投资者不应视本报告为作出投资决策的唯一因素。 有关分析师的申明和其他重要信息，见信息披露附录，或参阅www.gs.com/research/hedge.html。
高盛集团 全球投资研究
Lessons for China from Japan’s experience (part 1): Exploringsimilarities and differencesThe Japanese economy enjoyed an economic boom in the second half of the 1980s.After the bubble burst in the early 1990s, however, Japanese companies weresaddled with three excesses—excess debt, capital stock, and workers—whileJapanese banks suffered very severe non-performing loan (NPL) problems, which ledto the financial crisis in the late 1990s. As a result, Japan then experienced the so-called “lost decade” or the “lost two decades” (period of low growth and deflation).
China, meanwhile, has gone from a high growth era to a new development stagethat has become known as the “new normal.” However, many observers havepointed out excess capital stock and debt problems in China, and their similarities towhat Japan experienced after the collapse of the bubble. As part of our attempt toidentify the aspects of Japan’s experience that may offer useful lessons for China,we take a first step in this report by examining similarities and differences betweenthe Japanese and Chinese economies.
Similarities: Start of a demographic onus and consequent declinein growth/saving rates, as well as lower export dependenceWe begin with similarities. First of all, Japan and China are notably similar in termsof demographics change and the subsequent declines in their growth and savingrates. Exhibit 1 shows the demographic dividend, a frequently-used demographicindicator defined as the working age population (15-64 years old) divided by thedependent population (all other age groups). When the demographic dividend isrising (falling), this is known as a demographic bonus (onus). As these termsindicate, demographic trends are a tailwind (headwind) for the economy in the caseof a demographic bonus (onus). In Japan, the demographic bonus peaked in theearly 1990s, beyond which the country entered a demographic onus. China,meanwhile, experienced a major demographic turning point around 2010 due mainlyto the one-child policy adopted in the early 1980s.
Exhibit 1: Demographic bonus peaked in the early 1990s for Japan and in around 2010 for ChinaDemographic dividend (working age population/dependent population)
Source: UN
12 September 2016 Page 2
Goldman Sachs Asia Economics Analyst
When an economy enters a demographic onus, the economy typically loses growthmomentum via two main channels: production capacity and social burden. Theproduction capacity channel is easy to understand in terms of the linkage betweenworking age population and total labor input. For an economy experiencing ademographic onus, improvement in other production factors—growth in capital stockand enhancements in productivity—tends to be insufficient to make up for lowertotal labor input, and the potential growth rate therefore tends to fall.
The social burden channel can be outlined as follows. When the economy goes froma high birth rate to a low one, the large working age population born during the highbirth rate period is able to support the smaller number of young citizens. The per-person social burden for the working age population declines, the saving rate rises,and the economy can channel their savings into investments. As the proportion ofelderly citizens rises, however, the social burden of caring for the elderly increasesand eventually surpasses the positive effect of the decline in social burden due tothe lower birth rate.
Declines are therefore frequently seen in both the long-term trend growth and thenational saving rate as the economy moves from a demographic bonus to an onus.This looks evident in a Japan-China comparison (see Exhibits 2-3). Also, total factorproductivity in both Japan and China tended to catch up with the US level until thedemographic bonus peaked, and then lost momentum as the economy entered ademographic onus (See Exhibit 4).1.
1. The total factor productivity shown in Exhibit 4 is a relative level to the US, with 1.0 representing theUS level in each period.
Exhibit 2: Transition to a low-growth mode10-year average real GDP growth
Exhibit 3: The national saving rate also peaked outGross national saving (relative to GDP)
Source: IMF Source: IMF
12 September 2016 Page 3
Goldman Sachs Asia Economics Analyst
A noteworthy point here is that in both Japan and China equity market valuationspeaked out just before the demographic bonus peaked (see Exhibit 5). This maysuggest that (1) in the run-up to the peak of the bubble, the equity market has atendency to excessively extrapolate the good times of the bonus period in lateryears or (2) the market tends to factor in the enhanced sentiment of economicagents driven by strong demographic tailwinds and the subsequent headwinds in aforward-looking manner. 2.
External impetus was particularly important in high growth periodsAnother similarity can be seen in export growth (see Exhibit 6). Japan’s real exportgrowth was very high during the 1960s and 70s (high growth period). Particularlyafter the Plaza Accord in 1985, which was triggered by trade disputes betweenJapan and the US, JPY appreciated drastically and Japan needed to boost domesticdemand, resulting in lower export growth (see Exhibit 7).
In the case of China, its real export growth was very high until the mid-2000s, butstarted to decline around the time of the global financial crisis (GFC), whichcoincided with further appreciation of CNY which at the time was closely linked withthe appreciating US dollar. Significant export dependency in high growth periods,and the role of substantial currency appreciation as one of the important catalysts foreconomic rebalancing toward an economy driven more by domestic demand, aretraits shared by both countries.
2. See Nishimua, “Ageing, Finance and Regulations,” Keynote address at the Joint Forum Meeting heldin Tokyo, November 14, 2012.
Exhibit 4: Rapid productivity catch-up losing momentumTotal factor productivity (PPP basis; relative to US level =1.0 in eachyear)
Exhibit 5: Equity valuations peaked in both Japan and China justbefore the demographic bonus peakedMarket capitalization of equity markets (relative to GDP)
Source: Penn World Table 9.0 Source: TSE, Cabinet Office, Haver
12 September 2016 Page 4
Goldman Sachs Asia Economics Analyst
Transition from investment-driven to consumption-driven economy just beganin ChinaEmerging economies tend to exhibit a high investment-GDP ratio due to high returnson capital. As an economy develops, however, it needs to rebalance its domesticgrowth driver from investment to consumption chiefly because capital-intensiveeconomies create fewer jobs than labor-intensive ones; sustained very high capitalinvestment ratios like China’s also have tended to eventually lead to a slowdown inproductive growth.
Japan smoothly achieved its economic rebalancing (see Exhibit 8). The investmentratio rose steadily in its high growth period, but it started to reverse its trend in theearly 1970s and consumption has since increased its share.3. In China, theinvestment ratio has increased especially since the early 1990s and reached around45% in the early 2010s following the large economic stimulus after the GlobalFinancial Crisis. The Chinese government is well aware of the need to rebalance itseconomic growth driver, in our viewour, faced by the significant concerns overexcess capacity and debt problems. China’s economic rebalancing just began inrecent years, as was the case for Japan in the early 1970s.
3. See Fukumoto and Muto, “Rebalancing China’s economic growth: Some insights from Japan’sexperience,” Bank of Japan Working Paper Series, July 2011.
Exhibit 6: Export growth declined in China recently, similar toJapan from the mid-1980sReal export growth rate (yoy)
Exhibit 7: Currency appreciation likely a catalyst for lower exportdependenceNominal effective exchange rates (2010=100)
Source: MOF, IMF, Haver Source: Goldman Sachs Global Investment Research
12 September 2016 Page 5
Goldman Sachs Asia Economics Analyst
China has followed a financial liberalization process similar to Japan’sLet us turn to financial liberalization. When financial markets expand in tandem witheconomic development and the accumulation of wealth, it becomes increasinglydifficult for the government to directly control the flow of funds based on regulation.Moreover, market systems isolated by regulation are more easily criticized as closedoff by other countries. In this way, countries tend to be pressured into introducingmarket pricing mechanisms through financial liberalization, in our view.
Deregulation and the introduction of market mechanisms is a double-edged sword,though. In Japan, financial liberalization started with liberalizing interest rates around1980, which boosted money-making opportunities for non-financial companies andfunding costs for banks. Also, the development of direct financing markets enabledlarge enterprises to bypass banks and easily procure funding through commercialpaper, corporate bonds, equity financing, and other measures. This led banks, whichwere now faced with rising costs and lost business from major companies, to leantoward high-risk, but potentially high-return loans to SMEs and households,particularly in the area of construction and real estate, setting Japan on the pathtoward the creation of an asset bubble.
Economic scholars have noted the relationship between financial liberalization andasset bubbles more generally, not confined to Japan. For example, according toKaminsky and Reinhart (1998), many financial crises occur within five years offinancial liberalization, as it tends to lead to a rapid increase in lending and risingasset values.4. Mexico in the 1970s and Norway in the 1980s are well-knownexamples of bubbles that followed financial liberalization.
Exhibit 9 compares the timeline of financial deregulation between Japan and China.China has followed a financial liberalization path similar to Japan’s with a lag of 20-30
4. See Kaminsky and Reinhart, “The twin crisis: The causes of banking and balance-of-paymentsproblems”, American Economic Review, June 1999.
Exhibit 8: China’s transition to a consumption-driven economy just began
Source: IMF, Goldman Sachs Global Investment Research
12 September 2016 Page 6
Goldman Sachs Asia Economics Analyst
years, and is currently reaching the final phase of deposit rates and forexliberalization. We see a need for close monitoring of the consequences of China’sderegulation policies on financing/risk-taking behavior at both Chinese financialinstitutions and non-financial corporations. 5.
5. We may need to see the possibility that legislative deregulation (both in China and Japan) is notnecessarily substantial in actual administrative operations - but we believe the legislative changes stillindicate broad trends of financial liberalizations in the both countries.
Exhibit 9: China has followed a financial deregulation path similar to Japan
Source: Cabinet Office, Central Tanshi, PBOC, Nikkei, MOF, Goldman Sachs Global Investment Research
12 September 2016 Page 7
Goldman Sachs Asia Economics Analyst
Differences: China’s global presence continues to grow, and stillconsiderable potentialNext, we look at the differences. The sharpest contrast between China and Japan isin the two countries’ global presence: whereas Japan’s has been in sharp declineacross a broad spectrum from GDP to global trade, since the economic bubble burstin the 1990s, China’s remains on an upward trajectory (see Exhibit 10). As notedabove, an economy that moves from a demographic bonus to an onus will oftenstart to lose vitality as the structure of the economy changes with demographicshifts. While Japan has clearly set foot down this path, China has shown no signs asyet of waning growth in its global share.
In terms of longer-term development stages, this would suggest that China is still farfrom becoming a mature economy like Japan and continues to have significantgrowth potential in a wide range of areas. China’s economy has entered ademographic onus by definition, but it is worth noting that this is as much by politicaldesign, in the form of the one-child policy implemented around the early 1980s.China’s current per-capita GDP and capital equipment ratio are at similar levels tothose of Japan as of the late 1980s (see Exhibit 11). When it comes to itsurbanization ratio and human capital level, they have only just reached the same levelas Japan in the 1950-1960s.6. As outlined below, scope for growth in urbanizationand human capital, in particular, can be thought of as key to further economicdevelopment.
According to Sir Arthur Lewis, a Nobel laureate in economics, a population shift fromrural communities to urban centers lays the foundation for strong growth bypromoting a shift in the labor force from primary industry such as the ruralagricultural sector, where value added is low, to manufacturing and services industry,
6. We use human capital indicator included in the Penn World Table 9.0. Human capital is quantifiedbased on average years of schooling, and return on investment in education derived from the Mincerequation. It is a type of wage functions developed by the economist Jacob Mincer, which calculateinvestment returns of accumulated experience resulting from a wide range of education, includingschooling and vocational training.
Exhibit 10: China’s global economic presence is still growing
Source: IMF
12 September 2016 Page 8
Goldman Sachs Asia Economics Analyst
where added value is high7.. Also, an increase in the urban population is thought todrive growth in demand for social infrastructure. The strong likelihood that thisinfrastructure demand will stimulate private-sector capital expenditure also suggeststhe possibility of a subsequent increase in the capital equipment ratio.
Once surplus labor in the rural sector is exhausted, an economy is described asreaching the Lewis turning point, and wages begin to rise sharply. Wage growth canalso become the driving force behind a shift from an economy driven by themanufacturing sector, which tends to be overtaken by other developing countrieswith lower labor costs, to a consumption-based economy with a higher employmentabsorption capacity (see Exhibit 8).
There is also a very high correlation between urbanization and human capital (0.97for Japan, 0.94 for China). This is attributable to (1) higher education levels chieflydue to increased school attendance among urban residents compared with those inthe rural sector, and (2) greater opportunities to accumulate human capital thanks toeasy access to more sophisticated vocational training.
We next look at trends in the development of road infrastructure, as one example ofsocial capital stock. Exhibit 12 shows that total road length continued to grow at arate of around 1% annually during Japan’s post-war recovery period, but has sinceincreased at a very small rate. In China, however, road length has continued toincrease at a rate of close to 3% annually, even in recent years, indicating buoyantdemand for social infrastructure. Indeed, China’s total road length is currently onlyaround 4.5 mn kilometers, versus 6.5 mn kilometers in the United States, whosetotal land area is broadly comparable to China’s. If total road length continues togrow at a rate of 3% annually, it will take China almost 15 years to reach the UnitedStates’ current level.
Another noteworthy difference between China and Japan is the role of inward directinvestment in economic development (see Exhibit 13). Direct investment into Chinahas increased drastically since the early 1990s, when the “reform and opening-uppolicy” was strengthened.8. By contrast, the Japanese government was reluctant torapidly liberalize capital flows even after the onset of financial liberalization in the1960s, taking a very cautious step-by-step approach to protect domestic industries.
Furthermore, the closed nature of Japanese business practices hindered foreigncapital from taking root in Japan. We should watch out for the direction to be takenby the Chinese authorities, however, given that inward direct investment has slowedrecently and an increasing number of observers have pointed out changing practicesin antitrust actions and government procurement, for example, that may suggest aless receptive attitude towards foreign companies in the Chinese economy.9.
7. Arthur Lewis introduced this theory in his article titled “Economic development with unlimitedsupplies of labor,” The Manchester School, 1954.8. Deng Xiaoping made his famous southern tour of China in the spring of 1992, making speeches toassert his economic agenda of the “reform and opening-up policy,” although he had officially retired fromthe political scene by then. This has significantly influenced China’s economic policy by emphasizingexport-oriented growth supported by direct investment into China by foreign capital.9. See “2016 China Business Climate Survey Report,” The American Chamber of Commerce in the
12 September 2016 Page 9
Goldman Sachs Asia Economics Analyst
People’s Republic of China, June 2016, and “Business Confidence Survey”, The European Union Chamberof Commerce in China, June 2016.
Exhibit 11: China has further scope for growth in all areas
Source: IMF, UN, Penn World Table 9.0
Exhibit 12: Road development remains booming in ChinaGrowth in total road length
Exhibit 13: Large gap in inward direct investmentNet inward direct investment (relative to GDP)
Source: Ministry of Transport of the PROC, MLIT, Goldman Sachs Global Investment Research Source: IMF
12 September 2016 Page 10
Goldman Sachs Asia Economics Analyst
Both similarities and differences in terms of debt situationIn terms of the two countries’ debt situation, there are both similarities anddifferences (see Exhibit 14). First, credit to Chinese non-financial corporations hasincreased substantially since around 2010 to about 160% of GDP recently. The sameratio for Japanese counterparts peaked at around 150% in 1993. The significant debtbuildup is clearly a similarity between China and Japan, together with the fact thatboth financial systems have been bank-dominated. We should note, however, afaster pace of debt accumulation relative to the size of economy for China in thepost-GFC period, even compared with Japan in the bubble era.10.
Turning to households, the debt-to-GDP ratio is still much lower in China than inJapan, but the pace of debt buildup is higher in China, as is the case with non-financial corporate debt.
In contrast, China’s government debt-to-GDP ratio is much lower than Japan’s andthe pace of accumulation is much more modest. After the emergence of NPL
10. See Tilton and Sequeira, “Lessons for China from 150 years of Debt booms,” Asia Economics Analyst,June 20, 2016.
Exhibit 14: Similarities and differences for China and Japan’s debt situation
Source: BIS, Goldman Sachs Global Investment Research
12 September 2016 Page 11
Goldman Sachs Asia Economics Analyst
problems in the post-bubble period, the Japanese government sought to address theheavy drag on the economy caused by the NPL problems by employing a series ofshort-term fiscal stimuli. The tendency to rely on short-term fiscal stimuli led to asevere deterioration of the Japanese government’s fiscal health. That said, weshould note that the definition of government debt does not include potentialcontingent liabilities such as LGFV (local government financing vehicle) and SOE(state-owned enterprises) lending.
Concluding remarks and our next stepOur fact-finding highlighted the following similarities and differences between Japanand China’s economies.
1. SimilaritiesMajor similarities are closely related to demographics. Japan went from an
demographic bonus to a demographic onus in the early 1990s, and China did soaround 2010. When an economy enters a demographic onus, the long-termgrowth rate and saving rate both tend to begin declining.
Also in both countries, equity market valuations reached their peak just beforen
the demographic bonus reached its peak.
Another similarity can be seen in export dependency in high growth periods.n
Japan’s real export growth started to decline markedly following the Plaza Accordin 1985, while China’s real export growth has fallen in recent years even after theGFC. Such rebalancing toward an economy driven more by domestic demandwas preceded by significant currency appreciation.
Transition from investment-driven to consumption-driven economy just begann
in China in recent years, as is the case for Japan in the early 1970s, faced byconcerns over excess capacity and debt problems.
China has been in a financial liberalization process similar to Japan’s case withn
a lag of 20-30 years. In Japan, financial deregulation paved the way for thecreation of an asset bubble.
The significant buildup of corporate debt is clearly a similarity, together the factn
that both financial systems have been bank-dominated unlike the case of the US,for example.
2. DifferencesThe greatest difference is that while Japan’s global economic presence hasn
rapidly declined since it shifted to a demographic onus, China’s global presenceis still growing.
China is far from being a mature economy, like Japan. China’s per-capita GDPn
and current capital equipment ratio are only at the level seen in Japan in thelate 1980s, while its urbanization ratio and human capital level have only justreached the same levels as Japan in the 1950-1960s.
12 September 2016 Page 12
Goldman Sachs Asia Economics Analyst
China has tried to very proactively introduce foreign capital to facilitate growthn
since the early 1990s, creating the large gap in inward direct investment betweenChina and Japan.
China’s pace of private-sector debt buildup in recent years is faster thann
Japan’s bubble period, particularly for the non-financial corporate sector.Meanwhile, the Chinese government’s debt-to-GDP ratio is much lower andthe pace of government debt accumulation is much more modest, although weshould note that the definition of government debt does not include largepotential contingent liabilities such as LGFV and SOE lending.
There are many concerns about excessive production capacity and rising debt inChina. Japan experienced a prolonged stagnant period referred to as the “lost twodecades” after the collapse of the bubble economy in the early 1990s. China seemsto be firmly aware of these problems and wants to learn from Japan’s prolongedstruggles. In this report, we suggest that China is following a similar economic pathto Japan due to demographics resulting from the one-child policy, among otherfactors. We reaffirm, though, that China still has considerable potential for economicdevelopment compared with Japan.
Structural problems when left unattended can have the potential to become bigger.We believe given China now has substantial latent capacity, it is now a goodopportunity to tackle the problems of excessive capacity and non-performingloans.In the next report in this series, we intend to focus on prudence policy with aview to drawing lessons learned from Japan’s experience of NPL problems, after thebursting of bubbles in the early 1990s, that could be useful to China.
Naohiko BabaTomohiro OtaAndrew Tilton
12 September 2016 Page 13
Goldman Sachs Asia Economics Analyst
Forecast Tables
Source: Consensus Economics, Bloomberg, Goldman Sachs Global Investment Research
Source: Consensus Economics, Bloomberg, Goldman Sachs Global Investment Research
12 September 2016 Page 14
Goldman Sachs Asia Economics Analyst
Forecast Tables (continued)
Source: Haver Analytics, Bloomberg, Goldman Sachs Global Investment Research
Source: Bloomberg, Goldman Sachs Global Investment Research
12 September 2016 Page 15
Goldman Sachs Asia Economics Analyst
Highlights of Recent Goldman Sachs Global Macro Research
Asia ex-Japan
ASEAN: Establishing the imports and investment link Sep 1, 2016
Gauging the PBoC’s monetary policy stance Aug 19, 2016
SOE reform in China - potentially powerful, practically challenging Aug 5, 2016
Deciphering What Markets Say About Growth Jul 22,2016
Lower bound for interest rates in Asia?—assessing the constraints Jul 8,2016
China capital flows update—how cross-border RMB flow might mask outflow pressures Jul 4, 2016
Lessons for China from 150 Years of Debt Booms Jun 20, 2016
India: A tale of two economies - Rural and Urban Jun 9, 2016
Follow the “money” in China… to measure credit Jun 6, 2016
ASEAN: Monetary policy transmission and the liquidity environment May 26, 2016
How aging and rebalancing help lower required growth in China May 20, 2016
Faltering Asian tech-cycle—another growth leg might be weakening in North Asia May 13, 2016
Lower oil prices not all good news for regional growth May 9, 2016
China’s credit boost to growth—How long and how strong? May 4, 2016
Tracking China’s true investment Apr 22, 2016
The yin and the yang between China and the Fed Apr 18, 2016
ASEAN: Tracking private consumption expenditure Apr 8, 2016
Outbound capital flows—Lessons for boosters and blockers Mar 28, 2016
Global forces dominate the regional rate outlook Mar 21, 2016
Greater China
Gauging the PBoC’s monetary policy stance Aug 19, 2016
China capital flows update—how cross-border RMB flow might mask outflow pressures Jul 4, 2016
Follow the “money” in China… to measure credit Jun 6, 2016
How aging and rebalancing help lower required growth in China May 20, 2016
China’s credit boost to growth—How long and how strong? May 4, 2016
Tracking China’s true investment Apr 22, 2016
Sources and sizes of China’s capital outflows Jan 26, 2016
Tracking China’s fiscal stance: Beyond the official fiscal balance Jan 18, 2016
China 2016 outlook: Slowdown to continue, with policy a key buffer Dec 2, 2015
China’s bumpy deceleration continues, pulling region along for the ride Aug 31, 2015
How China’s equity market rollercoaster will affect the economy Jul 13, 2015
Gauging China’s growth Jun 22, 2015
Chinese growth hinges on the will and means of local governments May 18, 2015
Chinese growth and inflation are significantly impacted by the exchange rate Apr 13, 2015
12 September 2016 Page 16
Goldman Sachs Asia Economics Analyst
Korea/Taiwan
Assessing the current Asian exports cycle—Evidence from Korean exports Apr 7, 2016
Korea Views: 2016 general elections: A surprising loss of the majority by the ruling party Apr 14, 2016
Korea Views: Rate cut ahead on weak activity and strong KRW Mar 21, 2016
Korea Views: Fresh U.N. sanctions on North Korea—Outlook and investment implications Mar 7, 2016
Korea Views: Elevating geopolitical tensions—This time may be different Feb 25, 2016
Taiwan Views: Twin elections for Taiwan on January 16 Jan 12, 2016
Korea Views: Growth risks would outweigh financial crisis risks in 2016 Jan 4, 2016
Asia in Focus: Taiwan: Macro outlook for 2016—Weak exports and further monetary easing Nov 23, 2015
Korea Views: China’s restructuring poses a dilemma for the Korean economy Nov 23, 2015
India
India: A tale of two economies - Rural and Urban Jun 9, 2016
India: Watering the green shoots - Impact of a better monsoon on growth May 11, 2016
India: Composition of Upper House could change by mid-2016; further reforms ahead Apr 11, 2016
India: Services sector driving private sector corporate profitability Mar 31, 2016
India’s external debt – not an immediate concern Mar 3, 2016
India: Upside risks to short-term rates - the need for RBI intervention Mar 1, 2016
India’s fiscally prudent budget Feb 29, 2016
India Fiscal Policy - How much to stimulate Feb 11, 2016
India 2016 outlook: A cyclical upturn Dec 6, 2015
India: Can corporate leverage be a constraint on growth? Nov 6, 2015
India: “TEE”ing Up a New EM Growth Model Sep 11,2015
India: Food prices shift from downside to upside risk Jun 12, 2015
ASEAN
ASEAN: Establishing the imports and investment link Sep 1, 2016
ASEAN: Monetary policy transmission and the liquidity environment May 26, 2016
Q&A on the Philippines 2016 general elections May 6, 2016
ASEAN: Tracking private consumption expenditure Apr 8, 2016
ASEAN: Tracking fiscal performance and assessing fiscal space Feb 25, 2016
ASEAN 2016 economic outlook: Boosting domestic demand to overcome lackluster growth Nov 27, 2015
ASEAN: Surge, stop, flight and retrenchment in capital flows Oct 29, 2015
ASEAN: Implications of public infrastructure investment Sep 3, 2015
ASEAN: How predictable are the central banks? May 7, 2015
EMMD: Philippines expected to keep monetary policy steady in 2015 Mar 31, 2015
12 September 2016 Page 17
Goldman Sachs Asia Economics Analyst
Japan
Measuring Japanese markets’ reaction to economic news Aug 19, 2016
BOJ’s ETF purchase program could significantly improve stock supply/demand, but purchasing closer to limits Aug 3, 2016
Still large foreign visitor potential even as strong yen dampens spending Jul 26, 2016
Fiscal consolidation policy in an era of negative interest rates Jul 19, 2016
Durable goods consumption facing prolonged stock adjustment Jun 14, 2016
Persistent deflation behind long-term uptrend in real durable goods consumption May 31, 2016
Japan’s outward direct investment: Corporate earnings and global demand are key May 25, 2016
Assessing Japan’s labor shortage: Japan unlikely to be short-handed until mid-2020s at earliest Apr 28, 2016
Summer CPI rebasing: Smaller impact likely, some disinflation in 2015 Apr 20, 2016
Aging-related anxieties dampening consumption among working-age generations Apr 13, 2016
12 September 2016 Page 18
Goldman Sachs Asia Economics Analyst
Disclosure Appendix
Reg ACWe, Naohiko Baba, Tomohiro Ota and Andrew Tilton, hereby certify that all of the views expressed in this report accurately reflect our personal views,which have not been influenced by considerations of the firm’s business or client relationships.
Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.
DisclosuresGlobal product; distributing entitiesThe Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs on a global basis.Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics,currencies, commodities and portfolio strategy. This research is disseminated in Australia by Goldman Sachs Australia Pty Ltd (ABN 21 006 797 897); inBrazil by Goldman Sachs do Brasil Corretora de Títulos e Valores Mobiliários S.A.; in Canada by either Goldman Sachs Canada Inc. or Goldman, Sachs &Co.; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan by Goldman Sachs Japan Co.,Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs New Zealand Limited; in Russia byOOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America byGoldman, Sachs & Co. Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and EuropeanUnion.
European Union: Goldman Sachs International authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority andthe Prudential Regulation Authority, has approved this research in connection with its distribution in the European Union and United Kingdom; GoldmanSachs AG and Goldman Sachs International Zweigniederlassung Frankfurt, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht, may alsodistribute research in Germany.
General disclosuresThis research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that weconsider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates andforecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research asappropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majorityof reports are published at irregular intervals as appropriate in the analyst’s judgment.
Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investmentbanking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research Division.Goldman, Sachs & Co., the United States broker dealer, is a member of SIPC (http://www.sipc.org).
Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and principaltrading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, principal trading desks andinvesting businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.
The analysts named in this report may have from time to time discussed with our clients, including Goldman Sachs salespersons and traders, or maydiscuss in this report, trading strategies that reference catalysts or events that may have a near-term impact on the market price of the equity securitiesdiscussed in this report, which impact may be directionally counter to the analyst’s published price target expectations for such stocks. Any suchtrading strategies are distinct from and do not affect the analyst’s fundamental equity rating for such stocks, which rating reflects a stock’s returnpotential relative to its coverage group as described herein.
We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, actas principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The views attributed to third party presenters at Goldman Sachs arranged conferences, including individuals from other parts of Goldman Sachs, do notnecessarily reflect those of Global Investment Research and are not an official view of Goldman Sachs.
Any third party referenced herein, including any salespeople, traders and other professionals or members of their household, may have positions in theproducts mentioned that are inconsistent with the views expressed by analysts named in this report.
This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would beillegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs ofindividual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, ifappropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from themmay fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.
Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.Investors should review current options disclosure documents which are available from Goldman Sachs sales representatives or athttp://www.theocc.com/about/publications/character-risks.jsp. Transaction costs may be significant in option strategies calling for multiple purchase andsales of options such as spreads. Supporting documentation will be supplied upon request.
All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not allresearch content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of ourresearch by third party aggregators. For research, models or other data available on a particular security, please contact your sales representative or goto http://360.gs.com.
Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY10282.
© 2016 Goldman Sachs.
No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior writtenconsent of The Goldman Sachs Group, Inc.
12 September 2016 Page 19
Goldman Sachs Asia Economics Analyst
General Disclosures
This research is disseminated in China by Gao Hua Securities. Gao Hua Securities is licensed to conduct Securities Investment Consultancy.
This research is for our clients only. This research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment.
Goldman Sachs Gao Hua, an affiliate of Gao Hua Securities, conducts an investment banking business. Gao Hua Securities, Goldman Sachs Gao Hua and their affiliates have investment banking and other business relationships with a substantial percentage of the companies referred to in this document.
Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and principal trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our principal trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.
The analysts named in this report may have from time to time discussed with our clients, including Gao Hua Securities salespersons and traders, or may discuss in this report, trading strategies that reference catalysts or events that may have a near-term impact on the market price of the equity securities discussed in this report, which impact may be directionally counter to the analysts' published price target expectations for such stocks. Any such trading strategies are distinct from and do not affect the analysts' fundamental equity rating for such stocks, which rating reflects a stock's return potential relative to its coverage group as described herein.
Gao Hua Securities and its affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The views attributed to third party presenters at Gao Hua Securities or Goldman Sachs arranged conferences, including individuals from other parts of Gao Hua Securities or Goldman Sachs, do not necessarily reflect those of Global Investment Research and are not an official view of Gao Hua Securities or Goldman Sachs.
This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.
Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.
Investors should review current options disclosure documents which are available from Gao Hua sales representatives or at http://www.theocc.com/about/publications/character-risks.jsp. Transaction costs may be significant in option strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation will be supplied upon request.
All research reports are disseminated and available to all clients simultaneously through electronic publication to the Gao Hua portal. Gao Hua has not authorized any third party aggregators to redistribute its research. For research, models or other data available on a particular security, please contact your sales representative.
© 2016 Beijing Gao Hua Securities Company Limited
No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Beijing Gao Hua Securities Company Limited.
