Risks arising from political, economic, and legal and regulatory changes in countries and regions

「Rising social, political and military tensions in certain countries and regions could expose management resources, including employees, goods, capital and information, to danger, or impede trade, investment and other free economic activity.」

「米国関税影響等によりCROICは低下」

「Going forward, continued monitoring is required of developments in US trade policy and the impact of sustained price increases on personal consumption.」

「Meanwhile, continued close monitoring is required of geopolitical risks including the prolonged Russian invasion of Ukraine and escalating tensions in the Middle East, economic stagnation in China resulting from weak domestic demand and deterioration in real estate market conditions, and uncertainty associated with the outcome of the US presidential election and changes in policy.」

「Meanwhile, continued close monitoring is required of geopolitical risks including the prolonged Russian invasion of Ukraine and escalating tensions in the Middle East, economic stagnation in China resulting from weak domestic demand and deterioration in real estate market conditions, and uncertainty associated with the outcome of the US presidential election and changes in policy.」

「China's real GDP growth in 2023 was +5.2%, exceeding the government's target of around +5%, although growth slowed. The Central Economic Work Conference was held in December 2023 to determine economic policy for the following year. Its priority economic objectives included technological innovation, expanding domestic demand, opening up to the outside world, and preventing and resolving risks in key areas, including real estate, local government debt and small and midsize financial institutions.」

「A growing sense of uncertainty resulting from heightened geopolitical risks, including the prolonged Russian military invasion of Ukraine and the recent escalation of tensions in the Middle East.」

「In China, expectations for a full-scale recovery in economic activity rose after the zero-COVID policy was abolished and economic priorities were placed first at the 2022 Communist Party Congress. However, sentiment has continued to improve only slowly, with interest rates being cut in response to the sluggish real estate market and delayed recovery in demand. The outlook for economic activity requires close monitoring.」

「China's real GDP growth for July-September was +3.9% year on year, recovering from +0.4% in April-June, when activity had stagnated because of the impact of lockdowns. Meanwhile, the PMI, an important indicator for assessing economic conditions, remained below 50. Against this backdrop, the Chinese government announced an easing of its zero-COVID policy on 7 December. In the near term, disruption has been observed as the number of new infections has surged, and real GDP growth for October-December slowed to +2.9% year on year.」

「In China, economic activity in the first quarter was severely depressed by the impact of the zero-COVID policy. Even in the second quarter, after economic activity resumed, real GDP growth for July-September was limited to 3.9% year on year, and the improving trend in various business sentiment indices, including the PMI, did not continue. Economic activity remains lackluster. Continued attention will be required regarding economic indicators to be released in the future and developments in the zero-COVID policy.」

「During the first quarter of the current consolidated fiscal year, Russia's military invasion of Ukraine and sanctions imposed by countries in response, as well as urban lockdowns in China accompanying the spread of the novel coronavirus, increased downward pressure on the global economy.」

「During the period, downward pressure on the global economy increased amid the start of Russia's military invasion of Ukraine and the impact of sanctions imposed by countries in response.」

「While power shortages that had adversely affected manufacturing have been easing in China, concerns remain over factors slowing the economy, including restrained consumption resulting from sporadic infections caused by coronavirus variants and localized lockdowns, and declining investment in real estate development against the backdrop of lending restrictions on real estate developers.」

「In China, concerns include elevated commodity prices, supply constraints for semiconductors and other products, disruption in financial markets resulting from concerns over defaults by major real estate companies, and the impact of power shortages on production activity.」

「Meanwhile, Western countries are intensifying pressure on China, and the United States in particular has imposed export and investment restrictions on several Chinese companies. The risks to business with China require close monitoring.」

「In China, large-scale economic and monetary policies have proved effective alongside efforts to contain the spread of infection, and the economy has been recovering, led mainly by infrastructure investment. At the same time, continued attention is required regarding excessive investment, particularly in the real estate market, the intensifying US-China confrontation, and the issues involving Hong Kong and Taiwan.」

「China announced large-scale economic measures at the National People's Congress at the end of May, and infrastructure and real estate investment are leading the economic recovery. At the same time, continued attention is required as tensions rise over the intensifying US-China confrontation, the Taiwan issue, and the Nansha and Xisha Islands territorial disputes.」

「China's GDP growth rate turned negative for the first time in January-March 2020, and the country announced large-scale economic measures at the National People's Congress at the end of May. The effects of these measures in stimulating the economy, measures to address a second wave, and worsening relations with Europe and the United States following the enactment of the national security law require continued monitoring.」

「In China, the spread of the novel coronavirus brought production and other supply-side activity to a halt, while restrictions on the movement of people also weakened demand. Economic activity has slowed sharply, with GDP growth turning negative for the first time.」

「China's GDP growth rate for October-December 2019 was 6.0% year on year, the lowest level since 1992, following efforts to reduce excessive debt and overcapacity. In addition to fiscal stimulus and other measures to support the economy, developments including the relocation of factories to ASEAN countries require continued monitoring.」

「China's growth rate is tending to slow as excess debt and excess production capacity are reduced. In addition to government measures to support the economy and the future course of trade friction between China and the United States, attention is also required regarding the economic impact of clashes between the government and pro-democracy forces in Hong Kong over the extradition bill.」

「During the first quarter of the current consolidated fiscal year, the impact of trade friction between China and the United States and the resulting slowdown in China's economic growth began to materialize, increasing uncertainty surrounding the global economy. Trade friction between China and the United States, Brexit, the situation in the Middle East and US monetary policy will continue to require close monitoring.」

「In Europe, private consumption and capital investment remained firm, and economic growth continued, led by Germany and France. Meanwhile, uncertainty increased, including concerns about the UK's leaving the EU without an agreement and political demonstrations in France. In China, signs of an economic slowdown were becoming more pronounced due to declining infrastructure investment and weak private consumption. The impact of escalating trade friction with the United States and the direction of government economic measures require close monitoring.」

「In Europe, capital investment and private consumption remained firm, and economic growth continued, led by Germany and France. Meanwhile, uncertainty increased, including concerns about the UK's leaving the EU without an agreement and Italy's fiscal situation. In China, although infrastructure investment was slowing, the economy remained firm overall, supported by monetary easing, consumption and exports. Meanwhile, the impact of escalating trade friction with the United States requires continued monitoring.」

「Meanwhile, continued monitoring is required of the impact of US trade negotiations on the global economy and economic conditions in emerging markets where currencies are depreciating. In Europe, private consumption remained firm and economic growth continued, led by the German economy. Meanwhile, uncertainty persisted, including the UK's negotiations to leave the EU. In China, although investment in infrastructure showed weakness, the economy remained firm overall. Meanwhile, uncertainty regarding the outlook increased as share prices declined amid escalating trade friction with the United States.」

「In Europe, the recovery gained strength as exports and private consumption remained firm, and in October the European Central Bank announced a reduction in monetary easing. Meanwhile, uncertainty persisted, including the UK's negotiations to leave the EU and difficulties in coalition negotiations by the governing parties in Germany. In China, although investment in infrastructure and real estate moderated, the economy remained firm due to growth in exports and consumption. Meanwhile, the outlook remained uncertain, including how to address excess production capacity, environmental issues and debt problems.」

「In Europe, the economy continued to recover moderately as domestic demand, including private consumption, remained firm. Meanwhile, uncertainty persisted, including the impact of the governing party's narrow victory in Germany's general election, slow progress in the UK's negotiations to leave the EU and the continuing Greek debt problem. In China, the economy remained firm as investment in infrastructure and real estate expanded and consumption also remained robust. Meanwhile, the outlook remained uncertain, including economic policy after the autumn party congress, the response to the North Korea issue and progress in trade negotiations with the United States.」

「There were also sources of uncertainty, including the possibility of the European Central Bank scaling back monetary easing and banking problems in Italy. “Meanwhile, concerns about the future have also emerged, including economic policies from this autumn onward and the course of future trade negotiations with the United States.”」

「Meanwhile, the outlook remains uncertain, including the potential impact of the slowdown in the Chinese economy and policy developments under the new US administration on the global economy.」

「The UK's decision to leave the EU in the June referendum increased uncertainty and a lack of visibility regarding the outlook.」

「For each country and region, the company assigns a nine-level country rating based on objective methods according to the degree of country risk. It also sets a ceiling for net exposure based on the country rating and the size of the country, and keeps net exposure to each country within the applicable ceiling.」