Rhodium Group provides research, data, and insights that help clients understand and respond to new challenges and opportunities in China. Our teams have solutions for companies, investors, and governments that operate in or do business with China.
Global businesses face a new set of challenges and opportunities in China, and Rhodium Group is uniquely suited to help. We provide strategic planning support for world-leading tech, industrial, retail, and services companies. With Rhodium’s help, clients can develop robust China+ strategies, uncover new revenue and investment opportunities, map out risks, build mitigation plans, optimize cross-border operations, and stress-test internal assumptions.
We engage in tailored client relationships combining advisory support, access to Rhodium expertise, client-only data and research, and executive briefings on economic and policy dynamics in China, the US, and Europe, with a laser focus on implications for business strategy. We also support clients through forward-looking custom projects including supply chain and technology risk reviews, strategy red-teaming, scenario-planning, tabletop strategy exercises, and diversification planning.
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We review China’s role in four major sectors—apparel, consumer electronics, PV, and autos—over the past decade, then consider four plausible scenarios to 2030 and their implications for China’s future role in global trade and investment patterns.
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Although diversification is already underway, it proves difficult even in economies that have better security alignment with the US and the same attributes that made China attractive.
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New US tech controls will force a mindset shift for a wide range of industries on how their products could be national security risks.
The direction of China’s economy is of massive importance for investors. Our team provides an independent and unbiased view of China’s macroeconomy and policy choices that institutional investors need. Our highly experienced analysts take a credit-driven, “follow the money” approach to gauging the inflection points in China’s economic outlook. We have a track record of predicting where China’s economy will go well before it gets there, providing huge value for institutional investors.
Our team provides clients with seven to ten research notes per month that cut through the noise of China-related news and provide meaningful signals of China-related trends as they impact major asset markets. Clients can also engage in active and open conversation with our experts, bolstering their own in-house research capabilities.
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By our estimates, China’s GDP growth in 2024 improved modestly to around 2.4% to 2.8%, well below target. If it stimulates domestic demand with some urgency and ramps up debt, we think China could get to 3-4.5% growth in 2025.
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We explain what is holding back household consumption in China and examine the policy debate over how to catalyze consumer spending.
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China's economic policymaking process appears broken, or at the very least impaired.
Our team combines data-driven China macroeconomic analysis with deep knowledge of its global context to support decision-making in policy and commerce. Our team provides best in class written and visual analysis to help public and private sector clients better understand key questions about China and its relation to the world. Is Xi Jinping shifting the country toward a reform path? How does China’s slowdown impact its R&D spending and competitiveness? And how can other governments compare industrial competitiveness in leading-edge technology with Chinese counterparts?
By engaging actively in the public debate about China’s interactions with the world, we constantly test our analysis against real world experience with leader-level audiences. Our analysis—and the feedback it gets from practitioners—improves public and private understanding of China’s outlook.
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China’s investment-led growth model has reached its limits and household consumption will be the key driver of China’s long-term economic trajectory. Beijing has reform options available, though they vary in financial and political viability.
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The Third Plenum included laudable goals that would align with market norms under the Pathfinder framework. But with few exceptions, the decisions do not answer how these goals will be accomplished.
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Unless Beijing implements serious demand reforms, developing nations will be crowded out of manufacturing by Chinese overcapacity, leaving them dependent and without export opportunities.
Good policy and business decisions require transparency. Combining cutting-edge technology with deep analytical China expertise, we create data solutions that help public and private sector clients manage risks and seize opportunities connected to China’s development and emerging global footprint.
Our proprietary datasets combine official statistics, open source intelligence and China expertise to provide transparency in key areas of public policy interest, such as China’s domestic financial flows, its global investment footprint or the trajectory of China de-risking. Our data solutions for clients combine proprietary datasets with analytics and bespoke advisory tailored to their needs.
Helping investors manage their systemic China portfolio risk.
The China Cross-Border Monitor uses a transaction-based methodology to create a clear picture of China’s overseas investments and business presence.
Consumer electronics for the purpose of this section include laptops, desktop computers, smartphones, and tablets—as well as key inputs and components. See the methodological appendix for more detail of each category.
China’s fiscal accounts are divided into four separate budgets: the general budget, the government funds budget, the state capital operations budget, and the social security funds budget. The official budget deficit considers only the general budget, which covers day-to-day government operations, but a complete picture of China’s fiscal policy should ideally account for all four. The Ministry of Finance releases statistics for the general and government funds budgets on a monthly basis, but figures for the other two are released only annually. The general and government funds budgets accounted for a combined 79% of China’s total government expenditure in 2023.
The price deflator for government consumption is not provided by NBS and must be estimated. We follow Holz (2014) in estimating the government consumption deflator as a weighted average of CPI and PPI, yielding -0.1% government price growth for 2024 based on monthly price indices reported through November. See Carsten A. Holz, “The Quality of China’s GDP Statistics,” China Economic Review 30 (September 2014): 309–38, https://doi.org/10.1016/j.chieco.2014.06.009.
Final consumption expenditure, of which around 70% is household consumption, has contributed 2.4 pp to growth year-to-date through Q3, according to NBS figures.
NBS does not report the levels of the demand-side GDP components in real (price-adjusted) terms. Rhodium Group constructed estimates of these unreported data using reported nominal levels of GDP components, the reported percentage point contributions of major GDP components to real GDP growth, and price deflators.
One of the primary proponents of this view is Michael Pettis, who has outlined the problems of rebalancing toward China’s consumption in The Great Rebalancing (Princeton: Princeton University Press, 2013) and Trade Wars are Class Wars (New Haven: Yale University Press, 2020), with Matthew Klein, among other publications.
Scott Rozelle et al, “Moving Beyond Lewis: Employment and Wage Trends in China’s High‑ and Low‑Skilled Industries and the Emergence of an Era of Polarization,” Comparative Economic Studies vol. 62 (2020), p. 555-589.
Manufacturing goods are defined following the World Bank’s definition: Commodities in SITC sections 5 (chemicals), 6 (basic manufactures), 7 (machinery and transport equipment), and 8 (miscellaneous manufactured goods), excluding division 68 (non-ferrous metals), to which we re-added the manufactured product categories within division 68. South Asia includes Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka.
According to the latest release of TiVA data, OECD.
We use the IMF definition of developing countries. See https://www.imf.org/en/Publications/WEO/weo-database/2023/April/groups-and-aggregates.