Cautious optimism about 2017

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Werner Steinmueller, CEO Asia Pacific, Deutsche Bank.

A1 Despite global uncertainty, China has maintained stable GDP growth through the first nine months of the year and annual growth is on track to meet targets. We expect China to make progress in controlling broad credit growth, tightening the property market, and implementing reforms in coming quarters.

In the long run, there should be more focus on restructuring to accommodate a "new normal" of economic growth. This is no doubt a transition that will take many years, but with monetary and fiscal policies the authorities will be able to ensure stable growth and employment.

A2 We will continue to work with companies and investors to support market reform, and our goal is to remain a key component of a virtuous cycle, one in which market development leads to new opportunities for Deutsche Bank, and in turn our participation contributes to the depth, breadth, and best-practice standards of the local market and economy.

More broadly, the story of an emerging middle class in China is still unfolding. Private consumption proxies such as retail sales and property market data show us that household balance sheets are very resilient. Urbanization means there will be demand for social services and clean energy in cities across the country, presenting opportunities for companies and their financial partners.

A3 Deutsche Bank is delivering solid performance across Asia, and China is no exception. Our platform in China, which benefits from a long local history of over 140 years across transaction banking, capital markets and wealth management activities, is well-positioned for success.

In addition to Deutsche Bank's presence onshore, it is important to understand that a core part of our business and an area we excel at is serving Chinese clients outside of China. With our network and comprehensive product set, we help our clients solve the challenges they face.

A4 What's critical for us is the opportunity that comes with the continued internationalization of the renminbi. With our leadership in foreign exchange markets, we are uniquely placed to play a pioneering role in the currency's global development, and will continue to do so in 2017 and beyond. The transformation of China's economy will encourage more multinationals and financial institutions to transact payments, make investments, and hold reserves in renminbi. We are already seeing the stronger influence of the renminbi vis a vis the US dollar within the region, and expect this to continue. In addition, liberalization will increase foreign investors' participation in onshore capital markets and adoption of the renminbi as an investment currency.

A5 As China continues to reform and integrate with international capital markets, we see growth opportunities in virtually every one of our key business areas. One of the biggest is the trend of Chinese enterprises investing overseas. Equally, with greater market access and future index inclusion, foreign investors are keen to increase their share of renminbi assets. To facilitate this, we will continue to enhance and expand our capacity in transaction banking and capital markets, leveraging our global network and expertise to provide cross-border banking services.

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