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Economic Environment
CITIC Limited operates diversified businesses globally in various countries and regions. As a result, its financial
condition, operational results and business prospects are, to a significant degree, subject to the development of
both international and domestic economies, as well as the political and legislative environment.
As China’s economy is undergoing structural changes, the formation of new growth drivers involves further
reforms in a variety of areas, including politics, economy, technology, culture and society. With the sluggish
global economic recovery, growth remains soft in the developed economies and tends to be more divergent
across regions due to significant differences in inherent structures. In emerging markets, economic growth
continues to slow down. The economic rebound is still vulnerable due to the lowering of potential market
growth as well as the decline in commodity prices and capital outflows. If negative economic factors appear
in countries and regions in which CITIC Limited operates, there might be an adverse impact on its operational
results, financial condition and profitability.
Operational Risk
The financial services segment of the Group covers various sectors, including banking, securities, trust,
insurance and asset management. As information technology is widely applied in the modern financial services
industry, the reliability of computer systems, computer networks and information management software is
essential to both traditional financial and innovative businesses. Unreliable information technology systems or
underdeveloped network technologies may result in inefficient trading systems, business interruption, or loss
of important information, thus affecting the reputation and service quality of financial institutions and even
incurring economic losses and legal disputes.
CITIC Limited carries out resources and energy, manufacturing, engineering contracting, real estate and other
businesses in countries and regions across the world, and these businesses might continue to encounter a
diversity of operational difficulties. Certain difficulties, if beyond the control of CITIC Limited, might result
in production delays or increases in production costs. These operational risks include delay of government
payments, deterioration of tax policies, labour disputes, unforeseen technical failures, various disasters
and emergencies, unexpected changes in mineral, geological or mining conditions, pollution and other
environmental damage, as well as potential disputes with foreign partners, customers, subcontractors, suppliers
or local residents or communities. Such risks would cause damage or loss to the relevant businesses of CITIC
Limited, which in turn could adversely affect its operations, financial condition and profitability.