This report is also available in Chinese.
Globalization, and the rise of China’s manufacturing power after its entry into the World Trade Organization in particular, has been cited as one of the drivers behind the low and stable global inflation over the past two decades. With the Chinese government committed to de-carbonization and multinationals rethinking global supply chains after US-China tensions and the COVID pandemic, will China turn from a disinflationary force in the past into an inflationary driver in the future? We examine China’s role in global inflation in this note.
While discussions on the link between China and global inflation tend to focus on China supply, China demand plays an equally, if not more, important role. China accounted for almost all of the global metals demand increases over the past 20 years, and three quarters of that were for domestic consumption. The rapid expansion in infrastructure, property, and auto seen since 2000 is unlikely to be repeated. A gradual slowdown in demand growth, such as we expect, should be disinflationary rather than inflationary.
For upstream industries such as coal and steel, past capacity cuts to address overcapacity problems and production controls to improve air quality have led to low inventory and inelastic supply. Future de-carbonization moves are likely to keep these markets tight, resulting in high and volatile prices. But the downstream industries are entirely different. The experience of the COVID pandemic shows how flexible Chinese manufacturers can be, almost doubling exports of computers in a year on work-from-home demand surge for instance.
Within downstream industries, we observe a notable divergence between lower-tech sectors and higher-tech sectors. Supply elasticity in lower-tech sectors such as textiles and garment consistently trended lower during the 2010s while it stayed relatively stable in higher-tech sectors such as special equipment and electric machinery. Given the government’s emphasis on manufacturing upgrading in the 14th Five-Year Plan, supply elasticity in sectors such as semiconductors and new energy vehicles may increase in coming years with capacity expansion.
The combination of US-China tensions and the COVID-19 pandemic has led manufacturers to rethink input sourcing and supply chain resilience. A shift from a “lowest-cost” global supply chain to a “highest-resilience” one is undoubtedly inflationary in the near-term. However, the implication for inflation in the long run is ambiguous. In fact, if supply chains are indeed more resilient and less prone to disruptions, long-term inflation may even be lower on average as prices are less likely to spike on demand shocks.
Since the 1990s, inflation in major developed economies has stayed low and stable across the globe compared to the previous decades (Exhibit 1). Many drivers are behind the significant change, including monetary policies successfully anchoring inflation expectations, technological advancements, and better inventory management. One other driver often being cited is globalization, in particular China’s entry into the World Trade Organization (WTO) and the sharp rise in its manufacturing capacity. In 2001, China accounted for less than 2% of global trade. By 2019, 13% of global exports and 28% of global manufacturing value-added had originated from China. As labor costs increase and environmental restrictions are tightened, China’s ability to produce cheap manufactured goods comes into question. On the back of US-China trade tensions and global supply chains rearrangement, the argument goes, China may be turning from a global disinflationary factor to a global inflationary driver.
We look into China’s role in global inflation in this note. Through its demand, supply and industrial policies, the Chinese economy impacts both the level and the volatility of global inflation. The combined effect of China demand and China supply on the level of global inflation is more ambiguous than first meets the eyes. Strong economic growth and rapid urbanization lifted commodity prices (inflationary) on the one hand, while industrial overcapacity depressed PPI and exports prices (disinflationary) on the other. In addition, the likely path of China’s future economic development and policy directions points to less elastic supply in the upstream industries compared to the downstream industries. Within downstream, higher-tech sectors may potentially see more elastic supply relative to lower-tech sectors down the road. This transformation could lead to higher prices and more volatile inflation in upstream industries but lower prices and less volatile inflation in the higher-tech sectors. Lastly, global supply chain rearrangement would be undoubtedly inflationary in the near-term but could result in lower average inflation in the long run if the goal of maximizing production resilience is achieved.
While China’s manufacturing output has garnered most attention in discussions around the role of China in global inflation, Chinese demand plays an equally, if not more, important role relative to Chinese supply in global goods markets. Exhibit 3 shows that China’s new auto sales were only 11% of the US’ back in 2000. In recent years, however, they are 60% above new auto sales in the US. Exhibit 4 shows an even more striking picture in the housing market. The rapid pace of urbanization seen in China over the past two decades has been accompanied by strong growth in property construction and sales. Over the past few years, approximately 16 million newly built apartments are sold in China each year, compared to about 1 million per year in the US.
Because infrastructure, housing and automobiles built in China stay in China, the impact of expansions in these sectors on global goods markets can be attributed to China demand rather than China supply. Metals consumption provides a good example. Exhibit 5 shows that over 60% of steel consumption and over 50% of copper and aluminum consumption in China are in the infrastructure, housing and automobile sectors. In the case of copper, China’s share of global demand jumped from 12% in 2000 to 51% in 2019. Even under a generous assumption that half of all copper uses outside of infrastructure, housing and automobiles are eventually exported in the form of manufactured products, domestic demand still accounts for three quarters of total copper consumption (Exhibit 6).
The copper example echoes more rigorous findings in the academic literature. Previous research using a structural dynamic factor model shows that Chinese demand shocks mattered slightly more than supply shocks to prices in other countries in the sample period of 2002-2011. Going forward, the robust growth in infrastructure, housing and automobile sectors over the past two decades are unlikely to be repeated in China. Real GDP growth is expected to average 4.7% under the policy goal of doubling income by 2035, significantly lower than the average of 8.9% during 2005-2019. These suggest a meaningful disinflationary effect of China demand on global inflation in the coming years.
Source: Goldman Sachs Global Investment Research
China’s upstream sectors such as coal and steel have fundamentally changed. Back in 2013 and 2014, these industries were plagued with overcapacity problems and non-performing loans, threatening both the economy and financial stability. The 2015-2016 capacity cuts, more disciplined production controls in 2017-2019, and further supply restrictions after the government’s pledge last year to achieve carbon neutrality by 2060 all have contributed to an extremely tight market today. Exhibit 7 shows that, with inventory low and production controlled, idiosyncratic factors such as a hotter-than-usual summer or lower-than-usual hydro power generation can send coal prices significantly higher, raising both the level and volatility of inflation. Exhibit 8 shows that, a decade ago, a $100/ton price difference between China and ex-China could increase Chinese monthly steel exports by 3.4mn tons. Nowadays it takes a $1700/ton price incentive for Chinese steel exports to do so, implying a much lower supply elasticity.
The Chinese government appears to be committed to de-carbonization and prices in the upstream sectors, especially those with significant carbon emissions footprint, are likely to stay high and volatile. However, the picture in the downstream sectors looks entirely different. The experience of the COVID pandemic serves as a good example. The virus outbreak deteriorated quickly in other countries in 2020Q2, resulting in a sharp rotation in the types of goods demanded – more personal protection and work-from-home products and less travel-related products for instance. Chinese exporters were quick to adjust production and meet such drastic demand changes (Exhibit 9). In the case of computers, Chinese exports almost doubled from January 2020 to January 2021 to meet the surging work-from-home and online school demand. Consequently, we have seen limited computer price increases overseas. This demonstrates a high supply elasticity across varieties of Chinese downstream manufacturing industries.
Source: Haver Analytics, Goldman Sachs Global Investment Research
Even within the downstream industries, China’s supply dynamics have been evolving differently along the “lower-tech vs. higher-tech” dimension. Precisely estimating producers’ supply elasticity is difficult because of the endogeneity problem (i.e., prices affect supply but supply also affects prices) and valid instrumental variables that only affect prices but not supply are hard to come by. As a crude proxy, we use the difference between IP growth and lagged PPI growth to gauge supply elasticity. For instance, if 5% yoy growth in PPI three months ago is followed by 15% yoy growth in IP, the difference would be 10%. The higher this difference, the more elastic the supply might be. Note that this measure is not equivalent to supply elasticity as the difference between IP growth and PPI growth can be negative whereas supply elasticity cannot.
Among the lower-tech sectors such as textile, garment, and furniture, China’s supply elasticity appears to be trending lower over the past decade (Exhibit 11). A 10% increase in prices would have induced a 20% jump in production in the early 2010s (i.e., 10pp difference between IP and PPI growth in the chart), but only generates a 10% increase nowadays (i.e., zero difference between IP and PPI growth in the chart). By contrast, among the higher-tech sectors such as special equipment, electric machinery, and instruments and meters, China’s supply elasticity has remained relatively stable over the past 10 years (Exhibit 12). Note that due to data limitations, the industries used here are defined relatively broadly and we are not able to fine-tune the analysis using more detailed sub-industry data. To the extent there is divergence within each industry, we think China’s supply elasticity may be rising in some higher-tech sub-sectors with capacity expansion, in particular among those supported by government policies such as semiconductors and new energy vehicles.
The US tariffs placed on Chinese goods in 2018-2019 and the various supply chain disruptions caused by the COVID pandemic in 2020-2021 have led manufacturers to rethink input sourcing and production locations. On global supply chain rearrangement, we highlight two implications for prices and inflation. First, regarding production relocation that is motivated by costs – whether US tariffs or rising labor costs in China – we think the impact on global inflation is likely small. Even before the US-China trade war, for example, production of labor-intensive goods such as apparel and smartphone assembly had already been moved from China to countries like Bangladesh and Vietnam. Exhibit 13 shows that Chinese exports of footwear fell over the past 5 years but US footwear prices declined as well, suggesting cost-driven production relocation does not necessarily lead to higher prices and inflation.
Regarding the global supply chain rearrangement driven by a shift from the “lowest-cost” model to the “highest-resilience” model, the implication for inflation is different in the short-term vs. in the long-term. Exhibit 14 illustrates this point with a diagram. In the near-term, a move from low-cost regions to high-cost regions is clearly inflationary (there is a discrete jump in costs/prices moving from the lower-cost supply curve to the higher-cost/more resilient supply curve). But once the rearrangement is finished, which may take a few years, it is unclear whether inflation will remain permanently higher as this depends on the steady state inflation rate in low-cost regions vs. high-cost regions. In other words, moving production from China to the US may lead to a one-time increase in production costs because wages are higher in the US than in China. However, if wages grow at a slower pace in the US than in China, then production costs may also grow more slowly after the production relocation. In addition, since the new supply chain is optimized for highest resilience, production should be less likely to experience disruptions and prices should be less likely to spike on demand shocks after the production relocation, also contributing to lower average inflation in the long run.
When discussing China’s role in global inflation, it is crucial to take a comprehensive rather than a partial view of this complex question. At the aggregated level, both China demand and China supply matter to the level of global inflation. To be more precise about this point, we estimate a simple structural vector autoregressive (SVAR) model using quarterly data from 2009Q1 to 2019Q4. We use China Current Activity Indicator (CAI) to measure China growth and GDP growth for 23 other countries which collectively account for 55% of global GDP. We apply sign restrictions to separate demand shocks from supply shocks. We find China demand shocks to be significantly more important to CPI and PPI inflation in most of ex-China economies than same-size China supply shocks (Exhibit 15). Looking ahead, the gradual growth deceleration that we expect for China may generate enough disinflationary forces to counterbalance the upward pressure on global inflation from China’s de-carbonization and deleverage efforts.
In our previous analysis on supply chain shifts, we show that Chinese imports are more concentrated at the two ends of the product complexity spectrum, suggesting relatively low domestic supply elasticity among both upstream commodities and most sophisticated tech products. Exhibit 16 shows a stylized illustration of a hump-shaped China supply elasticity across different products. Our analysis above suggests that China’s supply elasticity in some upstream and lower-tech sectors may be falling. But China’s supply elasticity in downstream sectors, and higher-tech industries in particular, is likely to remain high or even increase. This mirrors the government’s push for stabilizing manufacturing share of GDP, manufacturing upgrading, and increased R&D to acquire technologies that are currently bottlenecks to China’s advanced manufacturing. In the fields that policymakers are targeting – semiconductors and new energy vehicles for example – China may drive its supply elasticity higher via capacity expansion in the future. If China's industrial restructuring is successful, its implications are tailwinds to ex-China producers in upstream and lower-tech sectors and headwinds to ex-China producers in downstream and higher-tech sectors.
Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html.
We, Hui Shan, Xinquan Chen, Maggie Wei, Helen Hu 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.
See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-managed public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs trades or may trade as a principal in debt securities (or in related derivatives) of issuers discussed in this report.
The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts, professionals reporting to analysts and members of their households from owning securities of any company in the analyst's area of coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst as officer or director: Goldman Sachs policy generally prohibits its analysts, persons reporting to analysts or members of their households from serving as an officer, director or advisor of any company in the analyst's area of coverage. Non-U.S. Analysts: Non-U.S. analysts may not be associated persons of Goldman Sachs & Co. LLC and therefore may not be subject to FINRA Rule 2241 or FINRA Rule 2242 restrictions on communications with subject company, public appearances and trading securities held by the analysts.
The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and regulations. Australia: Goldman Sachs Australia Pty Ltd and its affiliates are not authorised deposit-taking institutions (as that term is defined in the Banking Act 1959 (Cth)) in Australia and do not provide banking services, nor carry on a banking business, in Australia. This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act, unless otherwise agreed by Goldman Sachs. In producing research reports, members of the Global Investment Research Division of Goldman Sachs Australia may attend site visits and other meetings hosted by the companies and other entities which are the subject of its research reports. In some instances the costs of such site visits or meetings may be met in part or in whole by the issuers concerned if Goldman Sachs Australia considers it is appropriate and reasonable in the specific circumstances relating to the site visit or meeting. To the extent that the contents of this document contains any financial product advice, it is general advice only and has been prepared by Goldman Sachs without taking into account a client's objectives, financial situation or needs. A client should, before acting on any such advice, consider the appropriateness of the advice having regard to the client's own objectives, financial situation and needs. A copy of certain Goldman Sachs Australia and New Zealand disclosure of interests and a copy of Goldman Sachs’ Australian Sell-Side Research Independence Policy Statement are available at: https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html. Brazil: Disclosure information in relation to CVM Resolution n. 20 is available at https://www.gs.com/worldwide/brazil/area/gir/index.html. Where applicable, the Brazil-registered analyst primarily responsible for the content of this research report, as defined in Article 20 of CVM Resolution n. 20, is the first author named at the beginning of this report, unless indicated otherwise at the end of the text. Canada: Goldman Sachs Canada Inc. is an affiliate of The Goldman Sachs Group Inc. and therefore is included in the company specific disclosures relating to Goldman Sachs (as defined above). Goldman Sachs Canada Inc. has approved of, and agreed to take responsibility for, this research report in Canada if and to the extent that Goldman Sachs Canada Inc. disseminates this research report to its clients. Hong Kong: Further information on the securities of covered companies referred to in this research may be obtained on request from Goldman Sachs (Asia) L.L.C. India: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (India) Securities Private Limited, Research Analyst - SEBI Registration Number INH000001493, 951-A, Rational House, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India, Corporate Identity Number U74140MH2006FTC160634, Phone +91 22 6616 9000, Fax +91 22 6616 9001. Goldman Sachs may beneficially own 1% or more of the securities (as such term is defined in clause 2 (h) the Indian Securities Contracts (Regulation) Act, 1956) of the subject company or companies referred to in this research report. Japan: See below. Korea: This research, and any access to it, is intended only for "professional investors" within the meaning of the Financial Services and Capital Markets Act, unless otherwise agreed by Goldman Sachs. Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. New Zealand: Goldman Sachs New Zealand Limited and its affiliates are neither "registered banks" nor "deposit takers" (as defined in the Reserve Bank of New Zealand Act 1989) in New Zealand. This research, and any access to it, is intended for "wholesale clients" (as defined in the Financial Advisers Act 2008) unless otherwise agreed by Goldman Sachs. A copy of certain Goldman Sachs Australia and New Zealand disclosure of interests is available at: https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html. Russia: Research reports distributed in the Russian Federation are not advertising as defined in the Russian legislation, but are information and analysis not having product promotion as their main purpose and do not provide appraisal within the meaning of the Russian legislation on appraisal activity. Research reports do not constitute a personalized investment recommendation as defined in Russian laws and regulations, are not addressed to a specific client, and are prepared without analyzing the financial circumstances, investment profiles or risk profiles of clients. Goldman Sachs assumes no responsibility for any investment decisions that may be taken by a client or any other person based on this research report. Singapore: Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), which is regulated by the Monetary Authority of Singapore, accepts legal responsibility for this research, and should be contacted with respect to any matters arising from, or in connection with, this research. Taiwan: This material is for reference only and must not be reprinted without permission. Investors should carefully consider their own investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Conduct Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available from Goldman Sachs International on request.
European Union and United Kingdom: Disclosure information in relation to Article 6 (2) of the European Commission Delegated Regulation (EU) (2016/958) supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council (including as that Delegated Regulation is implemented into United Kingdom domestic law and regulation following the United Kingdom’s departure from the European Union and the European Economic Area) with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest is available at https://www.gs.com/disclosures/europeanpolicy.html which states the European Policy for Managing Conflicts of Interest in Connection with Investment Research.
Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer registered with the Kanto Financial Bureau under registration number Kinsho 69, and a member of Japan Securities Dealers Association, Financial Futures Association of Japan and Type II Financial Instruments Firms Association. Sales and purchase of equities are subject to commission pre-determined with clients plus consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the Japanese Securities Finance Company.
The 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 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); in Brazil by Goldman Sachs do Brasil Corretora de Títulos e Valores Mobiliários S.A.; Public Communication Channel Goldman Sachs Brazil: 0800 727 5764 and / or email@example.com. Available Weekdays (except holidays), from 9am to 6pm. Canal de Comunicação com o Público Goldman Sachs Brasil: 0800 727 5764 e/ou firstname.lastname@example.org. Horário de funcionamento: segunda-feira à sexta-feira (exceto feriados), das 9h às 18h; in Canada by either Goldman Sachs Canada Inc. or Goldman Sachs & Co. LLC; 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 by OOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman Sachs & Co. LLC. Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom.
Effective from the date of the United Kingdom’s departure from the European Union and the European Economic Area (“Brexit Day”) the following information with respect to distributing entities will apply:
Goldman Sachs International (“GSI”), authorised by the Prudential Regulation Authority (“PRA”) and regulated by the Financial Conduct Authority (“FCA”) and the PRA, has approved this research in connection with its distribution in the United Kingdom.
European Economic Area: GSI, authorised by the PRA and regulated by the FCA and the PRA, disseminates research in the following jurisdictions within the European Economic Area: the Grand Duchy of Luxembourg, Italy, the Kingdom of Belgium, the Kingdom of Denmark, the Kingdom of Norway, the Republic of Finland, Portugal, the Republic of Cyprus and the Republic of Ireland; GS -Succursale de Paris (Paris branch) which, from Brexit Day, will be authorised by the French Autorité de contrôle prudentiel et de resolution (“ACPR”) and regulated by the Autorité de contrôle prudentiel et de resolution and the Autorité des marches financiers (“AMF”) disseminates research in France; GSI - Sucursal en España (Madrid branch) authorized in Spain by the Comisión Nacional del Mercado de Valores disseminates research in the Kingdom of Spain; GSI - Sweden Bankfilial (Stockholm branch) is authorized by the SFSA as a “third country branch” in accordance with Chapter 4, Section 4 of the Swedish Securities and Market Act (Sw. lag (2007:528) om värdepappersmarknaden) disseminates research in the Kingdom of Sweden; Goldman Sachs Bank Europe SE (“GSBE”) is a credit institution incorporated in Germany and, within the Single Supervisory Mechanism, subject to direct prudential supervision by the European Central Bank and in other respects supervised by German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and Deutsche Bundesbank and disseminates research in the Federal Republic of Germany and those jurisdictions within the European Economic Area where GSI is not authorised to disseminate research and additionally, GSBE, Copenhagen Branch filial af GSBE, Tyskland, supervised by the Danish Financial Authority disseminates research in the Kingdom of Denmark; GSBE - Sucursal en España (Madrid branch) subject (to a limited extent) to local supervision by the Bank of Spain disseminates research in the Kingdom of Spain; GSBE - Succursale Italia (Milan branch) to the relevant applicable extent, subject to local supervision by the Bank of Italy (Banca d’Italia) and the Italian Companies and Exchange Commission (Commissione Nazionale per le Società e la Borsa “Consob”) disseminates research in Italy; GSBE - Succursale de Paris (Paris branch), supervised by the AMF and by the ACPR disseminates research in France; and GSBE - Sweden Bankfilial (Stockholm branch), to a limited extent, subject to local supervision by the Swedish Financial Supervisory Authority (Finansinpektionen) disseminates research in the Kingdom of Sweden.
This research is for our clients only. Other than disclosures relating to Goldman Sachs, 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 conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research Division. Goldman Sachs & Co. LLC, the United States broker dealer, is a member of SIPC (https://www.sipc.org).
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 asset management area, principal trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.
We and our affiliates, officers, directors, and employees, 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, unless otherwise prohibited by regulation or Goldman Sachs policy.
The views attributed to third party presenters at Goldman Sachs arranged conferences, including individuals from other parts of Goldman Sachs, do not necessarily 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 the products mentioned that are inconsistent with the views expressed by analysts named in this report.
This research is focused on investment themes across markets, industries and sectors. It does not attempt to distinguish between the prospects or performance of, or provide analysis of, individual companies within any industry or sector we describe.
Any trading recommendation in this research relating to an equity or credit security or securities within an industry or sector is reflective of the investment theme being discussed and is not a recommendation of any such security in isolation.
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. 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 and futures disclosure documents which are available from Goldman Sachs sales representatives or at https://www.theocc.com/about/publications/character-risks.jsp and https://www.fiadocumentation.org/fia/regulatory-disclosures_1/fia-uniform-futures-and-options-on-futures-risk-disclosures-booklet-pdf-version-2018. 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.
Differing Levels of Service provided by Global Investment Research: The level and types of services provided to you by the Global Investment Research division of GS may vary as compared to that provided to internal and other external clients of GS, depending on various factors including your individual preferences as to the frequency and manner of receiving communication, your risk profile and investment focus and perspective (e.g., marketwide, sector specific, long term, short term), the size and scope of your overall client relationship with GS, and legal and regulatory constraints. As an example, certain clients may request to receive notifications when research on specific securities is published, and certain clients may request that specific data underlying analysts’ fundamental analysis available on our internal client websites be delivered to them electronically through data feeds or otherwise. No change to an analyst’s fundamental research views (e.g., ratings, price targets, or material changes to earnings estimates for equity securities), will be communicated to any client prior to inclusion of such information in a research report broadly disseminated through electronic publication to our internal client websites or through other means, as necessary, to all clients who are entitled to receive such reports.
All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all research content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our research by third party aggregators. For research, models or other data related to one or more securities, markets or asset classes (including related services) that may be available to you, please contact your GS representative or go to https://research.gs.com.
Disclosure information is also available at https://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY 10282.
© 2021 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 written consent of The Goldman Sachs Group, Inc.