1 00:00:00,009 --> 00:00:02,339 Speaker 1: You're listening to AC N A podcast. 2 00:00:05,550 --> 00:00:08,619 Speaker 1: Hey, is Tiffany Ang here starting the show for Andrea 3 00:00:08,630 --> 00:00:12,228 Speaker 1: Hen on the Money Talks podcast? No, I'm not here 4 00:00:12,239 --> 00:00:14,890 Speaker 1: to replace Andrea. I'm here to give you some quick 5 00:00:14,899 --> 00:00:18,790 Speaker 1: financial updates. As I usually do. We've got an educational 6 00:00:18,799 --> 00:00:21,689 Speaker 1: one today. If I were to use a word to 7 00:00:21,700 --> 00:00:25,610 Speaker 1: describe China's stock market this past year, it would be 8 00:00:26,000 --> 00:00:26,969 Speaker 1: uh bumpy. 9 00:00:27,190 --> 00:00:29,829 Speaker 1: So on this episode and will be finding out if 10 00:00:29,840 --> 00:00:32,599 Speaker 1: this is a good time to consider putting money into 11 00:00:32,610 --> 00:00:36,330 Speaker 1: cheaper Chinese stocks. Now, I know you hear this every 12 00:00:36,340 --> 00:00:40,348 Speaker 1: episode but we say it because it's important. Please follow 13 00:00:40,360 --> 00:00:44,770 Speaker 1: us on Spotify Apple podcasts or youtube music. That way 14 00:00:44,779 --> 00:00:47,569 Speaker 1: you can get an alert when a new episode drops 15 00:00:47,580 --> 00:00:50,740 Speaker 1: each week. All right, let's start with some financial news. 16 00:00:50,750 --> 00:00:51,330 Speaker 1: Shall we? 17 00:00:52,110 --> 00:00:56,090 Speaker 1: Climate vouchers heard about them? Minister of State for sustainability 18 00:00:56,099 --> 00:00:59,740 Speaker 1: and the environment. Amy Ko announced this week that families 19 00:00:59,750 --> 00:01:03,490 Speaker 1: living in H DB flats will receive 300 Singapore dollars 20 00:01:03,500 --> 00:01:06,410 Speaker 1: in climate vouchers from April 15th. 21 00:01:06,809 --> 00:01:11,220 Speaker 1: So what are these vouchers for? Therefore purchasing more efficient appliances? 22 00:01:11,330 --> 00:01:14,870 Speaker 1: About 1.1 million H DB households will be given these 23 00:01:14,879 --> 00:01:18,018 Speaker 1: e vouchers and thankfully, they will come in a mix 24 00:01:18,029 --> 00:01:21,879 Speaker 1: of denominations. You can buy 10 types of energy and 25 00:01:21,889 --> 00:01:28,099 Speaker 1: water efficient household products, including refrigerators, washing machines, air conditioners, 26 00:01:28,110 --> 00:01:31,679 Speaker 1: and even led lights. So it's perfect if you are 27 00:01:31,690 --> 00:01:35,029 Speaker 1: thinking of replacing some of your household appliances now. 28 00:01:35,690 --> 00:01:37,860 Speaker 1: But how do you know if these items you're buying 29 00:01:37,870 --> 00:01:40,779 Speaker 1: are energy and water efficient? When you go down to 30 00:01:40,790 --> 00:01:44,239 Speaker 1: the shops, look for the energy and water labels. The 31 00:01:44,250 --> 00:01:48,050 Speaker 1: ticks will give you a good indication, search for redeem 32 00:01:48,059 --> 00:01:52,190 Speaker 1: SG and claim your e vouchers online. Well, speaking of 33 00:01:52,199 --> 00:01:55,349 Speaker 1: incentives to save the earth, Tesla is now in an 34 00:01:55,360 --> 00:02:01,150 Speaker 1: all out price war with Byd. In of all places, China, 35 00:02:01,620 --> 00:02:05,650 Speaker 1: the US electric vehicle giant is dishing out new incentives 36 00:02:05,819 --> 00:02:09,750 Speaker 1: to woo customers in the world's largest auto market customers 37 00:02:09,758 --> 00:02:12,860 Speaker 1: in China who buy selected models can get a maximum 38 00:02:12,869 --> 00:02:18,940 Speaker 1: of $4800 worth of incentives. These include discounts on car 39 00:02:18,949 --> 00:02:23,289 Speaker 1: insurance products and body pain changes. Byd. If you need 40 00:02:23,300 --> 00:02:27,080 Speaker 1: a quick refresher is the Chinese electric vehicle juggernaut. 41 00:02:27,419 --> 00:02:30,880 Speaker 1: It has responded with even greater discounts on its newer 42 00:02:30,889 --> 00:02:34,279 Speaker 1: car versions. Honestly, I don't think this is a bad thing. 43 00:02:34,288 --> 00:02:37,179 Speaker 1: It's good for the environment and more importantly for the 44 00:02:37,190 --> 00:02:41,698 Speaker 1: buyer's wallet. And regardless of which side wins eventually, if 45 00:02:41,710 --> 00:02:44,470 Speaker 1: you are buying shares with Tesla and Byd, you are 46 00:02:44,479 --> 00:02:46,038 Speaker 1: also going to be the winner 47 00:02:49,410 --> 00:02:57,360 Speaker 2: $7 trillion. Let that number sink in because that's how 48 00:02:57,369 --> 00:03:01,240 Speaker 2: much value has been lost in the Chinese stock market. 49 00:03:01,389 --> 00:03:05,399 Speaker 2: Namely China and Hong Kong listed equities since their peak 50 00:03:05,410 --> 00:03:09,520 Speaker 2: in 2021. The route is so bad that the Chinese 51 00:03:09,529 --> 00:03:15,359 Speaker 2: government has called for forceful pragmatic actions to stop the bleeding. 52 00:03:15,610 --> 00:03:18,729 Speaker 2: Even the man at the top President Xi Jinping could 53 00:03:18,740 --> 00:03:23,788 Speaker 2: not stay idle, regulators briefing him on the damage. It's 54 00:03:23,800 --> 00:03:25,960 Speaker 2: the start of the dragon year and it appeared to 55 00:03:25,970 --> 00:03:30,240 Speaker 2: bring some reprieve by way of, you know, holiday spending 56 00:03:30,250 --> 00:03:33,550 Speaker 2: and tourism. That tends to be the bellwether of Chinese 57 00:03:33,559 --> 00:03:37,309 Speaker 2: consumption for the year. But this may not be enough 58 00:03:37,320 --> 00:03:38,949 Speaker 2: because it's seasonal, right? 59 00:03:39,350 --> 00:03:42,809 Speaker 2: So for now, the outlook kind of remains bleak and 60 00:03:42,820 --> 00:03:46,610 Speaker 2: with China's recovery set to be a slow bumpy ride 61 00:03:46,619 --> 00:03:49,220 Speaker 2: or at least that's what people are telling me. We 62 00:03:49,229 --> 00:03:52,250 Speaker 2: want to ask if now is a good time to 63 00:03:52,259 --> 00:03:56,360 Speaker 2: consider pushing funds to cheaper Chinese stocks. Here to chat 64 00:03:56,369 --> 00:03:59,440 Speaker 2: with us is John Lin, Chief Investment Officer for China 65 00:03:59,449 --> 00:04:02,449 Speaker 2: Equities at Alliance Bernstein. Hey John, thanks for coming down. 66 00:04:02,619 --> 00:04:05,479 Speaker 2: Thank you for having me. So first let's get a 67 00:04:05,490 --> 00:04:06,720 Speaker 2: good understanding of 68 00:04:06,804 --> 00:04:10,324 Speaker 2: of what's happening in China. The headlines they're so hard 69 00:04:10,335 --> 00:04:14,054 Speaker 2: to ignore, right? They're screaming stock market route, weak recovery, 70 00:04:14,065 --> 00:04:19,024 Speaker 2: property crisis, big meetings among central bank officials. And then 71 00:04:19,035 --> 00:04:22,625 Speaker 2: of course a briefing for the Chiefs of China's Politburo. 72 00:04:22,964 --> 00:04:26,795 Speaker 2: So things sound like they're getting serious. But let's look 73 00:04:26,803 --> 00:04:30,975 Speaker 2: past the headlines. Tell me what's really happening in China 74 00:04:30,984 --> 00:04:33,345 Speaker 2: in a nutshell. Sure. I like the way you put 75 00:04:33,355 --> 00:04:34,184 Speaker 2: it right. Which is, 76 00:04:34,420 --> 00:04:37,869 Speaker 2: let's look at what's happening in the economy first before 77 00:04:37,880 --> 00:04:39,720 Speaker 2: you take a look at what's happening in the market. 78 00:04:39,730 --> 00:04:42,719 Speaker 2: Because we've been doing this a long time in China 79 00:04:43,100 --> 00:04:47,079 Speaker 2: and over a short period of time, the market is 80 00:04:47,089 --> 00:04:52,119 Speaker 2: actually often disconnected from fundamentals. There's just so much emotion 81 00:04:52,410 --> 00:04:54,910 Speaker 2: both on the upside and I guess what we're seeing 82 00:04:54,920 --> 00:04:57,670 Speaker 2: in the last six months, 12 months on the downside 83 00:04:57,678 --> 00:05:00,029 Speaker 2: as well. So I think the important thing is to 84 00:05:00,040 --> 00:05:02,529 Speaker 2: look at the economy and the companies and then the 85 00:05:02,540 --> 00:05:05,899 Speaker 2: earnings while the company actually earning because ultimately, when you're 86 00:05:05,910 --> 00:05:10,039 Speaker 2: buying stocks, you are buying slices of companies. Yeah, you're 87 00:05:10,049 --> 00:05:12,880 Speaker 2: not just flipping security and hope, you know, by next 88 00:05:12,890 --> 00:05:15,790 Speaker 2: Friday you can make, you know, $2. That's not the point. 89 00:05:16,200 --> 00:05:20,119 Speaker 2: And so the economy is slowing down and part of 90 00:05:20,130 --> 00:05:22,220 Speaker 2: that is cyclical and part of that structural. 91 00:05:22,579 --> 00:05:25,049 Speaker 2: So let's break that down a little bit on the 92 00:05:25,059 --> 00:05:29,489 Speaker 2: structural side, Chinese growth model for the last 1520 years. 93 00:05:29,500 --> 00:05:32,558 Speaker 2: As you probably have heard a lot of that has 94 00:05:32,570 --> 00:05:38,589 Speaker 2: been driven by this debt dependent or leverage, fueled property. 95 00:05:38,600 --> 00:05:42,170 Speaker 2: Almost developers borrow money, people borrow money to build house 96 00:05:42,178 --> 00:05:42,959 Speaker 2: and buy house, 97 00:05:44,000 --> 00:05:46,309 Speaker 2: they pay back later and that all works when property 98 00:05:46,320 --> 00:05:49,229 Speaker 2: prices are going up. But the problem with that is 99 00:05:49,238 --> 00:05:53,678 Speaker 2: you need an ever larger debt load to support that. 100 00:05:53,690 --> 00:05:55,609 Speaker 2: So you got to borrow ever more and more money. 101 00:05:56,119 --> 00:05:59,049 Speaker 2: So I think the authorities for quite a long time 102 00:05:59,059 --> 00:06:00,250 Speaker 2: are quite keen 103 00:06:00,619 --> 00:06:06,200 Speaker 2: to somehow reform this debt dependent growth model to stop that. 104 00:06:07,089 --> 00:06:09,799 Speaker 2: And I got serious really in the middle of COVID. 105 00:06:09,809 --> 00:06:13,619 Speaker 2: In 2021 the authorities putting a number of measures trying 106 00:06:13,630 --> 00:06:15,750 Speaker 2: to curb leverage growth in property market. 107 00:06:16,170 --> 00:06:20,589 Speaker 2: Long story short, those measures really worked and it really 108 00:06:20,600 --> 00:06:23,700 Speaker 2: popped the bubbles and it drove a large number of 109 00:06:23,709 --> 00:06:27,640 Speaker 2: bankruptcies by private developers. So today, if you look at 110 00:06:27,649 --> 00:06:30,488 Speaker 2: the economy, there are parts of it that's doing pretty 111 00:06:30,500 --> 00:06:33,730 Speaker 2: badly and there are parts of that's doing ok, if 112 00:06:33,738 --> 00:06:38,209 Speaker 2: not spectacular. And on average, they look bad. So what's 113 00:06:38,220 --> 00:06:41,079 Speaker 2: a bit that's doing pretty bad is anything property related? Right? 114 00:06:41,089 --> 00:06:42,279 Speaker 2: I think at the peak 115 00:06:42,720 --> 00:06:46,829 Speaker 2: of the economic cycle where this is 1824 months ago, 116 00:06:47,220 --> 00:06:52,500 Speaker 2: China was selling the equivalent of 1.6 billion square meters 117 00:06:52,510 --> 00:06:55,540 Speaker 2: of houses. This is like a space that's a lot 118 00:06:56,329 --> 00:07:00,159 Speaker 2: in calendar 2023. This is last year that's down to 119 00:07:00,170 --> 00:07:02,920 Speaker 2: about a billion square meter. So 1.6 to 1, that's 120 00:07:02,928 --> 00:07:05,230 Speaker 2: a pretty big drop. And then if you look at 121 00:07:05,238 --> 00:07:10,140 Speaker 2: the brokerage or the south side, analysts forecast in the marketplace, 122 00:07:10,149 --> 00:07:13,299 Speaker 2: not our forecast, but the markets forecast, people are predicting 123 00:07:13,309 --> 00:07:14,170 Speaker 2: that 1 billion 124 00:07:14,274 --> 00:07:16,214 Speaker 2: last year falls to something like 800 million this year. 125 00:07:16,825 --> 00:07:19,454 Speaker 2: So it continues to fall. But you notice that the 126 00:07:19,464 --> 00:07:22,154 Speaker 2: magnitude of fall started to decrease. Yes, that's right. I 127 00:07:22,165 --> 00:07:25,334 Speaker 2: was just about to say the gap is a bit narrower. Yeah. 128 00:07:25,345 --> 00:07:29,445 Speaker 2: So 1.6 to 1, pretty painful. Right. That's 600 million 129 00:07:29,454 --> 00:07:32,255 Speaker 2: of construction activities disappeared. Gone poof. 130 00:07:32,690 --> 00:07:35,589 Speaker 2: Now, if you go from 1 to 800 plus 200 million, 131 00:07:35,600 --> 00:07:39,140 Speaker 2: still painful, but a lot less than 600. And then 132 00:07:39,160 --> 00:07:42,799 Speaker 2: I think the trajectory is pointing to continue decline in 133 00:07:42,809 --> 00:07:46,109 Speaker 2: the property space, but maybe down to 100 sort of 134 00:07:46,119 --> 00:07:49,480 Speaker 2: incremental decrease. So you can see anything in the economy 135 00:07:49,489 --> 00:07:52,190 Speaker 2: that's related to housing. And by the way, at the 136 00:07:52,200 --> 00:07:56,369 Speaker 2: peak of the property contribution to the economy was something 137 00:07:56,380 --> 00:07:59,410 Speaker 2: like a third of the GDP was probably related, not 138 00:07:59,420 --> 00:08:00,989 Speaker 2: just construction, right? But 139 00:08:01,350 --> 00:08:06,019 Speaker 2: furniture and there's a whole ripple effect of industries that 140 00:08:06,029 --> 00:08:08,950 Speaker 2: get affected by just the property crisis because you're not 141 00:08:08,959 --> 00:08:12,429 Speaker 2: just thinking about the grand buildings that they're building, it's 142 00:08:12,440 --> 00:08:15,350 Speaker 2: a lot of jobs, it's a lot of materials, supply 143 00:08:15,359 --> 00:08:19,829 Speaker 2: chains and all, like you said, the furnishings involved. And 144 00:08:19,839 --> 00:08:24,190 Speaker 2: I'm so glad that you clarify just how closely the 145 00:08:24,200 --> 00:08:27,989 Speaker 2: property crisis is linked to the Chinese economy, the property 146 00:08:28,000 --> 00:08:30,970 Speaker 2: market or the contribution to the economy to China's 147 00:08:31,089 --> 00:08:34,359 Speaker 2: DP A third of that came from the real estate 148 00:08:34,369 --> 00:08:39,030 Speaker 2: sector and it's relevant industries. That's right. And so you 149 00:08:39,039 --> 00:08:42,250 Speaker 2: can see how the shrinkage of activities that, that we're 150 00:08:42,260 --> 00:08:44,960 Speaker 2: talking about 1.6 billion to 1 billion, all that stuff 151 00:08:44,969 --> 00:08:49,090 Speaker 2: shrinks that one third of economy in terms of jobs, 152 00:08:49,229 --> 00:08:51,630 Speaker 2: in terms of contribution to activities. 153 00:08:52,229 --> 00:08:55,679 Speaker 2: But what about the other two thirds, what's that doing? 154 00:08:56,260 --> 00:08:59,450 Speaker 2: And the biggest portions of those two third one is 155 00:08:59,460 --> 00:09:02,289 Speaker 2: obviously domestic consumption. And we all know China is a 156 00:09:02,299 --> 00:09:06,270 Speaker 2: really big economy. Now people die now they travel, there's 157 00:09:06,280 --> 00:09:11,119 Speaker 2: just a lot of internal activity, service sector, etcetera. And 158 00:09:11,130 --> 00:09:11,890 Speaker 2: they're doing OK. 159 00:09:12,239 --> 00:09:15,039 Speaker 2: Right. They are activities going on. This is not a 160 00:09:15,049 --> 00:09:19,409 Speaker 2: picture of an economy that's in free fall in implosion mode. 161 00:09:19,760 --> 00:09:22,709 Speaker 2: This is a slowing down and parts of the economy 162 00:09:22,719 --> 00:09:26,820 Speaker 2: probably that's doing badly like consumption and services are if 163 00:09:26,830 --> 00:09:30,419 Speaker 2: not spectacular. They're doing OK. And there are parts of 164 00:09:30,429 --> 00:09:35,309 Speaker 2: the economy like the industrial sectors, particularly those that are 165 00:09:35,320 --> 00:09:36,859 Speaker 2: related to companies that 166 00:09:37,150 --> 00:09:43,289 Speaker 2: have had a really good niche business, building buses, tractors, forklifts, 167 00:09:43,299 --> 00:09:47,080 Speaker 2: those are actually doing quite well. They've seen revenues grow 168 00:09:47,090 --> 00:09:52,709 Speaker 2: last year, especially from exports and exports, not to making 169 00:09:52,719 --> 00:09:56,650 Speaker 2: stuff in Zhejiang province and selling Walmart, but rather making 170 00:09:56,659 --> 00:09:59,849 Speaker 2: buses and making forklifts and sell that in Saudi Arabia, 171 00:10:00,440 --> 00:10:03,580 Speaker 2: what we call the global south today, other emerging markets 172 00:10:04,260 --> 00:10:06,859 Speaker 2: and that's a big growth driver and that's humming, that's 173 00:10:06,869 --> 00:10:10,280 Speaker 2: going well. So if you then zoom out and look 174 00:10:10,289 --> 00:10:13,130 Speaker 2: at the headline level and you are averaging a third 175 00:10:13,140 --> 00:10:16,700 Speaker 2: of the economy kind of shrinking in freefall. Two third 176 00:10:16,710 --> 00:10:20,409 Speaker 2: of the economy kind of growing but not spectacular. The 177 00:10:20,419 --> 00:10:23,419 Speaker 2: average number doesn't look good. China did also have some 178 00:10:23,429 --> 00:10:27,909 Speaker 2: of the strictest longest COVID restrictions and they were among 179 00:10:27,919 --> 00:10:30,090 Speaker 2: the last, if not the last to reopen 180 00:10:30,510 --> 00:10:36,010 Speaker 2: how much of this was a factor on the economic recovery? Yeah, 181 00:10:36,020 --> 00:10:41,650 Speaker 2: I think the COVID-19 pandemic had a very strong impact 182 00:10:41,729 --> 00:10:43,650 Speaker 2: to the overall economic pictures today, 183 00:10:44,030 --> 00:10:47,659 Speaker 2: but it's in somewhat more nuanced ways and maybe two 184 00:10:47,669 --> 00:10:51,760 Speaker 2: principal ways I can see that playing out one is 185 00:10:51,770 --> 00:10:55,089 Speaker 2: that it damaged, particularly the SME s and we all 186 00:10:55,099 --> 00:10:57,419 Speaker 2: know that in most economies is the small and medium 187 00:10:57,429 --> 00:11:00,299 Speaker 2: companies and medium enterprises are where all the jobs are. 188 00:11:00,710 --> 00:11:02,700 Speaker 2: And a lot of those are in moms and pops 189 00:11:02,710 --> 00:11:05,820 Speaker 2: services restaurant you run on the corner of the street, etcetera. 190 00:11:06,559 --> 00:11:09,669 Speaker 2: Those were really, really hurt and many were hurt to 191 00:11:09,679 --> 00:11:13,280 Speaker 2: the bones during COVID-19 and related lockdowns. 192 00:11:13,570 --> 00:11:17,130 Speaker 2: And so they take time to come back and because 193 00:11:17,140 --> 00:11:19,719 Speaker 2: they were hurt so much, some of them were not 194 00:11:19,729 --> 00:11:22,189 Speaker 2: able to come back and therefore some of the jobs 195 00:11:22,200 --> 00:11:25,069 Speaker 2: related to that corner restaurant is gone. And so that 196 00:11:25,080 --> 00:11:28,709 Speaker 2: certainly hurt consumer sentiment and that hurt the balance sheet 197 00:11:28,719 --> 00:11:31,679 Speaker 2: of companies and that her ability of people to spend. 198 00:11:31,690 --> 00:11:33,369 Speaker 2: Because if you don't have jobs, you don't have income, 199 00:11:33,380 --> 00:11:35,489 Speaker 2: you don't have income, you don't spend money, right? And 200 00:11:35,500 --> 00:11:37,200 Speaker 2: if I link that to what we said earlier before, 201 00:11:37,210 --> 00:11:40,108 Speaker 2: that's why the consumption activities is 202 00:11:40,719 --> 00:11:43,989 Speaker 2: not falling apart but not spectacular. The second portion that 203 00:11:44,000 --> 00:11:48,848 Speaker 2: is quite interesting because China actually gained a lot of 204 00:11:48,859 --> 00:11:52,630 Speaker 2: market share when it comes to exports during COVID. Why 205 00:11:52,640 --> 00:11:55,619 Speaker 2: is that? It's because if you remember what happened back 206 00:11:55,630 --> 00:11:59,969 Speaker 2: then was countries like the US like Western Europe. Even 207 00:11:59,979 --> 00:12:03,659 Speaker 2: here in Singapore, the government actually hand out a lot 208 00:12:03,669 --> 00:12:08,020 Speaker 2: of assistance, gave money to citizens of the respective countries 209 00:12:08,030 --> 00:12:09,739 Speaker 2: to help them through that tough period. 210 00:12:10,190 --> 00:12:12,419 Speaker 2: And what do people do when you're on lockdown at home? 211 00:12:12,429 --> 00:12:14,849 Speaker 2: But people gave you a lot of money is you spend, 212 00:12:15,059 --> 00:12:17,710 Speaker 2: you find, you find stuff to buy a lot. And 213 00:12:17,719 --> 00:12:20,840 Speaker 2: so if you are American, you've just got $2000 in your, 214 00:12:20,859 --> 00:12:23,309 Speaker 2: in your mail. I'm going on amazon.com. I'm going to 215 00:12:23,320 --> 00:12:26,169 Speaker 2: buy this and I'm going to ask. But who makes 216 00:12:26,179 --> 00:12:31,130 Speaker 2: those things? Emerging market factories, right? Factories in China, Indonesia 217 00:12:31,140 --> 00:12:34,169 Speaker 2: and Mexico. But you know what, especially the beginning part 218 00:12:34,179 --> 00:12:34,729 Speaker 2: of COVID 219 00:12:35,039 --> 00:12:40,619 Speaker 2: Mexico was closed. Vietnam was closed. Cambodia was closed. What's open? 220 00:12:40,789 --> 00:12:46,380 Speaker 2: China only China was open. So Chinese companies, especially the 221 00:12:46,390 --> 00:12:49,650 Speaker 2: exporters gained a huge amount of I will call them 222 00:12:50,150 --> 00:12:54,280 Speaker 2: temporary market share because all the other competitors were shut down. 223 00:12:54,580 --> 00:12:56,770 Speaker 2: And so they made a lot of money during that time. 224 00:12:56,869 --> 00:13:01,929 Speaker 2: So that did two things. One is that gave policymakers 225 00:13:01,940 --> 00:13:05,739 Speaker 2: confidence in hindsight, maybe too much confidence to crack down 226 00:13:05,750 --> 00:13:08,010 Speaker 2: on the property sector because they looked at part of 227 00:13:08,020 --> 00:13:09,699 Speaker 2: the economy and go oh look at these exporters. They're 228 00:13:09,710 --> 00:13:14,189 Speaker 2: humming they're making money, hand over fist. They were paying 229 00:13:14,200 --> 00:13:15,450 Speaker 2: a lot of money to the workers. 230 00:13:15,969 --> 00:13:17,729 Speaker 2: Of course, that means I can crack down on the 231 00:13:17,739 --> 00:13:20,390 Speaker 2: property sector because the other part of the economy is doing. 232 00:13:20,750 --> 00:13:25,250 Speaker 2: So they thought that that sector of the economy was 233 00:13:25,260 --> 00:13:29,510 Speaker 2: enough to cover any losses that may have bled from 234 00:13:29,659 --> 00:13:30,869 Speaker 2: the property crackdown. 235 00:13:31,280 --> 00:13:34,599 Speaker 2: That's certainly a factor, right? But then of course, as 236 00:13:34,609 --> 00:13:37,859 Speaker 2: we talked about, this is temporary because now we know 237 00:13:37,869 --> 00:13:42,090 Speaker 2: Mexico is open, Vietna is back in the game back. 238 00:13:42,469 --> 00:13:45,900 Speaker 2: And so some of that extra business not exporters were 239 00:13:45,909 --> 00:13:50,500 Speaker 2: doing were gone. And so that's actually accelerating or contributing 240 00:13:50,510 --> 00:13:52,219 Speaker 2: to the downturn that we're seeing today. 241 00:13:52,479 --> 00:13:55,949 Speaker 2: But again, that's probably temporary because you gain something temporary, 242 00:13:56,059 --> 00:13:58,569 Speaker 2: you lose that. So there's sort of one time effect 243 00:13:58,710 --> 00:14:01,539 Speaker 2: and not all to normalize over time. There's this question 244 00:14:01,549 --> 00:14:07,739 Speaker 2: I have about whether China's repressive policies towards fintech e-commerce, 245 00:14:07,750 --> 00:14:11,718 Speaker 2: online gaming, even the education sector, could that have been 246 00:14:11,729 --> 00:14:14,359 Speaker 2: a contributing factor as well to the route we're seeing 247 00:14:14,369 --> 00:14:18,549 Speaker 2: today in China? I think it certainly does and principally 248 00:14:18,559 --> 00:14:19,739 Speaker 2: about confidence 249 00:14:20,030 --> 00:14:22,830 Speaker 2: by investors and not these are not just global investors 250 00:14:22,840 --> 00:14:25,729 Speaker 2: but local investors and investors. And the market is like 251 00:14:25,739 --> 00:14:29,190 Speaker 2: one thing and they like certainty anytime that certainty goes away, 252 00:14:29,200 --> 00:14:33,690 Speaker 2: you start to price things a little bit lower, decrease valuation. 253 00:14:34,099 --> 00:14:35,919 Speaker 2: But then that's sort of zoom out and look at 254 00:14:35,929 --> 00:14:38,460 Speaker 2: the history of Chinese policy making when it comes to 255 00:14:38,469 --> 00:14:41,200 Speaker 2: businesses and we've been doing this for a long time, 256 00:14:41,210 --> 00:14:44,239 Speaker 2: we've been looking at Chinese companies for decade and a half. 257 00:14:44,250 --> 00:14:46,979 Speaker 2: And there's one thing that's very consistent, which is a 258 00:14:46,989 --> 00:14:51,640 Speaker 2: Chinese government or the policymakers are always a factor in 259 00:14:51,650 --> 00:14:52,830 Speaker 2: every business regulation. 260 00:14:53,590 --> 00:14:55,659 Speaker 2: And in a way that the business is allowed to 261 00:14:55,669 --> 00:14:58,200 Speaker 2: earn money, that's just the way it is. And if 262 00:14:58,210 --> 00:15:00,859 Speaker 2: investors aren't comfortable with that, they ought not to be 263 00:15:00,869 --> 00:15:05,000 Speaker 2: in China, that's unlikely to change. But I think what 264 00:15:05,010 --> 00:15:08,289 Speaker 2: happened was there was a period of time, particularly just 265 00:15:08,299 --> 00:15:10,840 Speaker 2: before COVID, there was a lot of global money coming 266 00:15:10,849 --> 00:15:15,739 Speaker 2: to China. And they, I think incorrectly thought that here 267 00:15:15,750 --> 00:15:17,700 Speaker 2: are a set of companies, your 268 00:15:18,070 --> 00:15:21,820 Speaker 2: e-commerce tech of the world that are exposed to middle 269 00:15:21,830 --> 00:15:28,090 Speaker 2: class Chinese consumer growth, but quote immune from government policy meddling. Now, 270 00:15:28,099 --> 00:15:30,400 Speaker 2: the first part is true. The second part, we emphatically 271 00:15:30,409 --> 00:15:32,559 Speaker 2: think it is untrue. And then of course, what we 272 00:15:32,570 --> 00:15:34,869 Speaker 2: found out is then all business are the same, they 273 00:15:34,880 --> 00:15:37,650 Speaker 2: are all exposed the same way. So I think that 274 00:15:37,659 --> 00:15:39,049 Speaker 2: sort of realization 275 00:15:39,469 --> 00:15:42,419 Speaker 2: came from the fact that people forgot about history or 276 00:15:42,429 --> 00:15:45,530 Speaker 2: a new set of questions coming who aren't used to it. 277 00:15:45,580 --> 00:15:47,969 Speaker 2: And so I do think you need to have that 278 00:15:47,979 --> 00:15:52,679 Speaker 2: on the ground understanding the grassroots research. But then one 279 00:15:52,690 --> 00:15:55,099 Speaker 2: must not forget that. Then you have to look at 280 00:15:55,109 --> 00:15:59,130 Speaker 2: the impact of some of these regulations on companies and 281 00:15:59,140 --> 00:16:03,030 Speaker 2: the volatility or the uncertainty that comes with this policy 282 00:16:03,039 --> 00:16:08,169 Speaker 2: making by itself actually can create money making opportunities for us. 283 00:16:08,440 --> 00:16:11,669 Speaker 2: A good example of that will be this education industry crackdown. 284 00:16:11,679 --> 00:16:13,570 Speaker 2: And if you look at some of these companies that 285 00:16:13,580 --> 00:16:16,700 Speaker 2: were at the eye of the storm of the crackdown, 286 00:16:16,710 --> 00:16:20,440 Speaker 2: your after school tutoring schools that are listed on the 287 00:16:20,450 --> 00:16:22,729 Speaker 2: Hong Kong Exchange for example or in the US. 288 00:16:23,440 --> 00:16:26,020 Speaker 2: It's been what three years now since the policy came out. 289 00:16:26,030 --> 00:16:29,030 Speaker 2: If you look at their PNL over the last three years, 290 00:16:29,309 --> 00:16:32,929 Speaker 2: you can barely see the impact of it. So the 291 00:16:32,940 --> 00:16:37,049 Speaker 2: regulation really scared the market, the stock felt a long 292 00:16:37,059 --> 00:16:40,619 Speaker 2: way and then boom, the stock came back because as 293 00:16:40,630 --> 00:16:42,409 Speaker 2: it turned out, it wasn't that big of a deal 294 00:16:42,419 --> 00:16:45,750 Speaker 2: in terms of regulation. So had you done the homework 295 00:16:45,760 --> 00:16:48,789 Speaker 2: and the research, there's actually a decent amount of money 296 00:16:48,984 --> 00:16:53,005 Speaker 2: making opportunities in this type of policy changes and the 297 00:16:53,015 --> 00:16:57,635 Speaker 2: market overreaction. And if you take a step back and 298 00:16:57,645 --> 00:17:01,405 Speaker 2: look at particularly the way global investors have been viewing 299 00:17:01,414 --> 00:17:04,994 Speaker 2: China and I think this is partly what's contributing to 300 00:17:05,005 --> 00:17:08,323 Speaker 2: the bearish sentiment we're seeing today, which is they looked 301 00:17:08,344 --> 00:17:08,375 Speaker 2: at 302 00:17:08,780 --> 00:17:13,410 Speaker 2: the slowing economy, they looking at the uncertainties that come 303 00:17:13,420 --> 00:17:18,000 Speaker 2: from policy making and some are concluding that China is 304 00:17:18,010 --> 00:17:20,689 Speaker 2: no longer investable. So what's your response to that then? 305 00:17:20,699 --> 00:17:32,010 Speaker 2: Is China uninstall saying I hope you make about a 306 00:17:32,020 --> 00:17:37,310 Speaker 2: load of money. This is a culture that prices 307 00:17:37,949 --> 00:17:42,409 Speaker 2: the entrepreneur spirit, they will congratulate each other for making money, 308 00:17:42,420 --> 00:17:45,050 Speaker 2: for finding the opportunity to make money. I think this 309 00:17:45,060 --> 00:17:49,569 Speaker 2: is at the core of any good equity market environment 310 00:17:49,579 --> 00:17:54,438 Speaker 2: which is, can you find people, can you find businesses 311 00:17:54,449 --> 00:17:57,420 Speaker 2: that are good that are organized and geared in a 312 00:17:57,430 --> 00:18:01,030 Speaker 2: way that want to make money for its shareholders? If 313 00:18:01,040 --> 00:18:03,069 Speaker 2: you don't have that, forget about it, that market is 314 00:18:03,079 --> 00:18:06,660 Speaker 2: not investable. I would argue that Gong Xi Far time 315 00:18:06,719 --> 00:18:07,170 Speaker 2: means 316 00:18:07,670 --> 00:18:10,810 Speaker 2: this is a market now for the last 2000 years 317 00:18:10,819 --> 00:18:13,379 Speaker 2: and for the next 1000 year, I would bet we 318 00:18:13,390 --> 00:18:17,530 Speaker 2: always have people who are very geared toward finding good 319 00:18:17,540 --> 00:18:21,609 Speaker 2: business opportunities and monetize that. And because that's the case, 320 00:18:22,060 --> 00:18:26,859 Speaker 2: invariably, you can find good investments as an equity investor. Therefore, 321 00:18:26,869 --> 00:18:30,229 Speaker 2: China is imminently investable. That's the angle I come from. 322 00:18:30,239 --> 00:18:32,619 Speaker 2: It's not looking at some of these short term hiccups, 323 00:18:32,630 --> 00:18:36,659 Speaker 2: et cetera. It's can you find good business opportunities? And 324 00:18:36,670 --> 00:18:38,829 Speaker 2: I think the answer is yes. Ok. And since you 325 00:18:38,839 --> 00:18:43,219 Speaker 2: answered yes, which sectors would these be in, especially pertaining 326 00:18:43,229 --> 00:18:46,589 Speaker 2: to the individual investor or even a regular investor? Where 327 00:18:46,599 --> 00:18:47,300 Speaker 2: should I be looking? 328 00:18:47,810 --> 00:18:50,479 Speaker 2: Yeah, some of the companies that we found that have 329 00:18:50,489 --> 00:18:52,969 Speaker 2: been working well last year and so far are really 330 00:18:52,979 --> 00:18:56,290 Speaker 2: well this year and maybe working well is not just 331 00:18:56,300 --> 00:18:58,569 Speaker 2: that the share price is going up, but really the earnings, 332 00:18:58,760 --> 00:19:02,569 Speaker 2: what we care about is are the companies making money 333 00:19:02,579 --> 00:19:06,670 Speaker 2: and growing despite the whatever the environment they're in. And 334 00:19:06,680 --> 00:19:10,030 Speaker 2: many industrial companies that we found are really quite interesting. 335 00:19:10,160 --> 00:19:11,239 Speaker 2: And these are 336 00:19:11,359 --> 00:19:17,140 Speaker 2: industrial makers of construction equipment or buses or heavy duty truck, 337 00:19:17,150 --> 00:19:21,069 Speaker 2: diesel engines. Now, over the competition in the last 2030 338 00:19:21,079 --> 00:19:24,270 Speaker 2: years emerged out of the competition in China as some 339 00:19:24,280 --> 00:19:27,540 Speaker 2: of the best maker of their products in the world. 340 00:19:27,969 --> 00:19:30,859 Speaker 2: And so today, they have a foot in the China 341 00:19:30,869 --> 00:19:33,660 Speaker 2: market by being a leader in bus making or forklift, 342 00:19:33,670 --> 00:19:37,550 Speaker 2: making whatever it is. But also another foot in exports 343 00:19:37,560 --> 00:19:38,889 Speaker 2: to emerging markets. 344 00:19:39,280 --> 00:19:43,260 Speaker 2: We like that because today, as we talked about the 345 00:19:43,270 --> 00:19:46,290 Speaker 2: domestic China market isn't all that strong, but it could 346 00:19:46,300 --> 00:19:50,209 Speaker 2: come back. And so we want to have that optionality 347 00:19:50,319 --> 00:19:53,968 Speaker 2: to participate in the upside. But while China is in 348 00:19:53,979 --> 00:19:55,890 Speaker 2: the recovery phase itself, 349 00:19:56,280 --> 00:19:59,569 Speaker 2: these companies are able to earn and continue to grow 350 00:19:59,579 --> 00:20:03,239 Speaker 2: through exports. We all know Saudi Arabia, what's going through 351 00:20:03,250 --> 00:20:07,439 Speaker 2: this giant construction boom right now. And I'm sure people 352 00:20:07,449 --> 00:20:11,579 Speaker 2: talked about property boom in Dubai, all those things need 353 00:20:11,589 --> 00:20:16,699 Speaker 2: construction machinery and they are all Chinese. And so here 354 00:20:16,709 --> 00:20:20,780 Speaker 2: is a way to participate in the construction boom in 355 00:20:20,790 --> 00:20:22,439 Speaker 2: the Gulf in the Middle East. 356 00:20:23,400 --> 00:20:28,800 Speaker 2: Another one is um dividend yielding companies good old fashioned boring, 357 00:20:28,810 --> 00:20:32,899 Speaker 2: stable cash flow yield. And other than the fact that 358 00:20:32,910 --> 00:20:34,770 Speaker 2: it is stable and it gives you cash back, you 359 00:20:34,780 --> 00:20:37,550 Speaker 2: know who doesn't like that. There's an additional phenomena which 360 00:20:37,560 --> 00:20:42,689 Speaker 2: is the domestic Asian market in China historically, don't care 361 00:20:42,699 --> 00:20:48,310 Speaker 2: about dividends. Historically, investors in China really reward companies are 362 00:20:48,319 --> 00:20:49,429 Speaker 2: growing and growing fast. 363 00:20:49,959 --> 00:20:53,339 Speaker 2: They don't care about companies paying dividend back. This is 364 00:20:53,349 --> 00:20:56,640 Speaker 2: very different in places like Hong Kong or Singapore, a 365 00:20:56,650 --> 00:20:59,979 Speaker 2: much more developed market. And that's because China used to 366 00:20:59,989 --> 00:21:03,739 Speaker 2: grow much faster. So it's all about growth. But today 367 00:21:03,750 --> 00:21:07,930 Speaker 2: China is no longer the high growth go market. So 368 00:21:07,979 --> 00:21:11,750 Speaker 2: dividends becoming priced just like it is in Hong Kong 369 00:21:11,760 --> 00:21:15,540 Speaker 2: and Singapore. But the valuation is only catching up. It 370 00:21:15,550 --> 00:21:16,420 Speaker 2: hasn't reached 371 00:21:16,680 --> 00:21:19,510 Speaker 2: that same high valuation that it is in Hong Kong 372 00:21:19,520 --> 00:21:21,540 Speaker 2: and Singapore, but it has the potential to but it 373 00:21:21,550 --> 00:21:24,089 Speaker 2: has the potential to. So we like that. It's one 374 00:21:24,099 --> 00:21:28,159 Speaker 2: of these catch up maturing stories as China becomes will 375 00:21:28,170 --> 00:21:32,520 Speaker 2: converge to that of the behavior of other markets. So 376 00:21:32,530 --> 00:21:32,899 Speaker 2: one of the 377 00:21:32,974 --> 00:21:35,864 Speaker 2: sectors that I was told to look into when it 378 00:21:35,875 --> 00:21:39,844 Speaker 2: comes to Chinese stocks is the EV space where there 379 00:21:39,854 --> 00:21:43,555 Speaker 2: is significant growth. But here comes the important part for 380 00:21:43,564 --> 00:21:46,625 Speaker 2: our listeners. When China's chips are down, is this an 381 00:21:46,635 --> 00:21:49,155 Speaker 2: opportunity for us to buy in the EV space? 382 00:21:50,550 --> 00:21:54,250 Speaker 2: We think the EV space is really interesting but maybe 383 00:21:54,270 --> 00:21:56,910 Speaker 2: not all parts of the supply chain. So I think 384 00:21:56,920 --> 00:21:59,540 Speaker 2: you have to be really quite careful. You take an 385 00:21:59,550 --> 00:22:03,560 Speaker 2: EV in your mind, break that up into components, zoom 386 00:22:03,569 --> 00:22:07,770 Speaker 2: that out into sort of like Thanos snap a finger 387 00:22:07,959 --> 00:22:08,800 Speaker 2: and then this whole thing. 388 00:22:09,984 --> 00:22:12,944 Speaker 2: So you can then visualize the supply chain all the 389 00:22:12,954 --> 00:22:18,494 Speaker 2: way back to lithium mining, to battery making, to battery assembly, 390 00:22:18,505 --> 00:22:21,224 Speaker 2: to assembly of the car. So actually all the way 391 00:22:21,234 --> 00:22:26,015 Speaker 2: to charging pylons. So the competitive landscape is very different 392 00:22:26,025 --> 00:22:28,545 Speaker 2: in each part of that. So what we're seeing right 393 00:22:28,555 --> 00:22:32,795 Speaker 2: now is enormous amount of competition when it comes to 394 00:22:32,805 --> 00:22:34,104 Speaker 2: electric vehicle because 395 00:22:34,510 --> 00:22:39,589 Speaker 2: everyone and their grandmother has launched electric vehicle models. And 396 00:22:39,599 --> 00:22:43,390 Speaker 2: when that happens, the revenue or the volume is growing 397 00:22:43,400 --> 00:22:47,119 Speaker 2: because people are, are changing and this is structural is no, no, make, 398 00:22:47,130 --> 00:22:51,589 Speaker 2: no mistake. We believe that EVs are the future. But 399 00:22:51,719 --> 00:22:55,819 Speaker 2: during this phase of intense competition, you also make less money. 400 00:22:55,829 --> 00:22:59,329 Speaker 2: And so I think that one ought to look carefully 401 00:22:59,339 --> 00:23:00,329 Speaker 2: at the supply chain 402 00:23:00,569 --> 00:23:03,510 Speaker 2: and the intensity of competition in different parts of it. 403 00:23:03,670 --> 00:23:07,680 Speaker 2: So you've got to disaggregate each part of the component 404 00:23:07,689 --> 00:23:12,030 Speaker 2: and buy those companies not only grow, but get to 405 00:23:12,040 --> 00:23:15,109 Speaker 2: keep the profit from the growth instead of competing in 406 00:23:15,119 --> 00:23:17,550 Speaker 2: that way because otherwise you are much better off being 407 00:23:17,560 --> 00:23:22,020 Speaker 2: a driver of B ID than necessarily the investor. That's 408 00:23:22,030 --> 00:23:24,619 Speaker 2: a funny one. That's a good one. What's the profile 409 00:23:24,630 --> 00:23:27,989 Speaker 2: of investor that can and should be in China? 410 00:23:28,560 --> 00:23:31,379 Speaker 2: First of all, when it comes to investing, one ought 411 00:23:31,390 --> 00:23:35,149 Speaker 2: to think long term. And so trying to trade in 412 00:23:35,160 --> 00:23:37,938 Speaker 2: and out of an asset class or even a stock 413 00:23:37,949 --> 00:23:41,550 Speaker 2: sort of this week or this month, that's a hard task. 414 00:23:41,560 --> 00:23:44,219 Speaker 2: And can I call the market bottom this month versus 415 00:23:44,229 --> 00:23:46,409 Speaker 2: next month? I don't think we can. That's a very 416 00:23:46,420 --> 00:23:47,449 Speaker 2: difficult task. 417 00:23:47,699 --> 00:23:51,479 Speaker 2: Some do it really well. And that's why they're fabulously rich. 418 00:23:51,489 --> 00:23:54,680 Speaker 2: But generally speaking, that's a hard task. The way we 419 00:23:54,689 --> 00:23:58,579 Speaker 2: think about China is one is a large deep market 420 00:23:58,589 --> 00:24:01,919 Speaker 2: full of interesting business and business people. And so you 421 00:24:01,930 --> 00:24:03,859 Speaker 2: ought to be able to find good companies if you 422 00:24:03,869 --> 00:24:04,989 Speaker 2: look carefully. 423 00:24:05,339 --> 00:24:08,589 Speaker 2: And then second is that the Chinese market itself tend 424 00:24:08,599 --> 00:24:11,170 Speaker 2: to have a very different rhythm than other big markets 425 00:24:11,180 --> 00:24:13,780 Speaker 2: like the SNP, et cetera. And so that means in 426 00:24:13,790 --> 00:24:17,699 Speaker 2: a well balanced portfolio, there usually ought to be a 427 00:24:17,709 --> 00:24:21,339 Speaker 2: place for something like the Chinese equity because it provides 428 00:24:21,349 --> 00:24:25,040 Speaker 2: that nice diversification. Put it differently when things are working 429 00:24:25,050 --> 00:24:28,260 Speaker 2: really well for us MP stocks, China might not like 430 00:24:28,270 --> 00:24:31,040 Speaker 2: it's the case for the last 23 years. And if 431 00:24:31,050 --> 00:24:33,160 Speaker 2: you think about before those 23 years, 432 00:24:33,364 --> 00:24:36,165 Speaker 2: it is actually the reverse, but China worked really well 433 00:24:36,175 --> 00:24:38,244 Speaker 2: and maybe us was having a little bit of hiccup. 434 00:24:38,395 --> 00:24:41,295 Speaker 2: And so I think for investors who want a well 435 00:24:41,305 --> 00:24:44,765 Speaker 2: balanced portfolio with a long term time frame, it is 436 00:24:44,775 --> 00:24:48,344 Speaker 2: a nice asset cost to have a think about. Ok, interesting. 437 00:24:48,564 --> 00:24:50,464 Speaker 2: I want to look into the future now just to 438 00:24:50,474 --> 00:24:54,635 Speaker 2: round up our conversation. What have China's officials done so 439 00:24:54,645 --> 00:24:57,385 Speaker 2: far to stop the bleeding in the stock market? What's 440 00:24:57,395 --> 00:25:00,494 Speaker 2: the future going to look like given the current circumstances 441 00:25:00,505 --> 00:25:01,025 Speaker 2: in China, 442 00:25:01,729 --> 00:25:05,329 Speaker 2: that's a good question. And the government actions when it 443 00:25:05,339 --> 00:25:08,000 Speaker 2: comes to supporting the economy or supporting the market and 444 00:25:08,010 --> 00:25:10,208 Speaker 2: those are not the same thing by the way. So 445 00:25:10,219 --> 00:25:12,510 Speaker 2: I think we ought to look at those two separately. 446 00:25:12,739 --> 00:25:15,920 Speaker 2: But if you look at the market supporting policy so 447 00:25:15,930 --> 00:25:16,390 Speaker 2: far 448 00:25:16,670 --> 00:25:19,929 Speaker 2: as you said, there is really no public announcements about 449 00:25:19,939 --> 00:25:23,209 Speaker 2: government is doing this or that, But we can glean 450 00:25:23,319 --> 00:25:26,890 Speaker 2: from some of the market behaviors, trading volumes in certain 451 00:25:26,900 --> 00:25:30,239 Speaker 2: instruments to guess that. And this is just a guess 452 00:25:30,410 --> 00:25:33,280 Speaker 2: that the government has been intervening in the market or 453 00:25:33,479 --> 00:25:36,530 Speaker 2: what they call national team has been sort of supporting 454 00:25:36,540 --> 00:25:40,109 Speaker 2: the market. But through buying ETF S and as a 455 00:25:40,119 --> 00:25:44,489 Speaker 2: participant in the market, we would generally think that the 456 00:25:44,500 --> 00:25:46,319 Speaker 2: market should be allowed 457 00:25:46,739 --> 00:25:50,409 Speaker 2: to discover its own price, right? We believe that's the 458 00:25:50,420 --> 00:25:52,719 Speaker 2: best way for the market to clear, which is you 459 00:25:52,729 --> 00:25:55,290 Speaker 2: and I agree on a price and I'll sell you something. You, 460 00:25:55,300 --> 00:25:58,569 Speaker 2: you sell me something and that's a precursor to what's 461 00:25:58,579 --> 00:26:05,260 Speaker 2: needed for a nice functioning market. So direct market fiddling 462 00:26:05,339 --> 00:26:08,979 Speaker 2: is never something that we really would advocate for. At 463 00:26:09,060 --> 00:26:11,829 Speaker 2: the same time. I think if indeed they are buying 464 00:26:11,839 --> 00:26:13,609 Speaker 2: ETF S, that's a lot better than, 465 00:26:13,704 --> 00:26:16,795 Speaker 2: and what they've done in 2015, which is coming into 466 00:26:16,805 --> 00:26:20,875 Speaker 2: the market and pick winners and losers randomly or through 467 00:26:20,885 --> 00:26:23,844 Speaker 2: a system that we don't understand trying to buy individual stocks. 468 00:26:24,104 --> 00:26:28,035 Speaker 2: And so that's what's happening to the marketplace. But by 469 00:26:28,045 --> 00:26:30,864 Speaker 2: far the things that we like to see as an 470 00:26:30,875 --> 00:26:35,385 Speaker 2: investor is really supportive policies when it comes to the economy. 471 00:26:35,655 --> 00:26:39,834 Speaker 2: Because if the economy stabilizes or property sector stabilizes corporate 472 00:26:39,844 --> 00:26:40,704 Speaker 2: earnings recover, 473 00:26:41,000 --> 00:26:42,699 Speaker 2: you don't need to put any money in the market. 474 00:26:42,709 --> 00:26:46,129 Speaker 2: Money comes of its own accord from all corners of 475 00:26:46,140 --> 00:26:48,719 Speaker 2: the world because who doesn't like to buy stocks that 476 00:26:48,729 --> 00:26:51,810 Speaker 2: go up, right? And so we would think that in 477 00:26:51,819 --> 00:26:55,489 Speaker 2: terms of policy makers, the best use of China's resources 478 00:26:55,500 --> 00:27:00,619 Speaker 2: is probably finding places where the government's funds or capital 479 00:27:00,630 --> 00:27:03,780 Speaker 2: or resources can have the most impact in terms of 480 00:27:03,790 --> 00:27:07,819 Speaker 2: stabilizing the growth picture overall, whether it's parts of the 481 00:27:07,949 --> 00:27:11,770 Speaker 2: property market or parts of the economy that are most 482 00:27:11,780 --> 00:27:15,300 Speaker 2: beneficial in terms of those supporting policies to create things 483 00:27:15,310 --> 00:27:19,739 Speaker 2: like jobs. You have been a massive help in mapping 484 00:27:19,750 --> 00:27:22,540 Speaker 2: out the dots of the Chinese stock market for us. 485 00:27:22,589 --> 00:27:25,569 Speaker 2: I've come away with more knowledge now than 486 00:27:26,069 --> 00:27:28,810 Speaker 2: we did when we first started this conversation. So thank 487 00:27:28,819 --> 00:27:31,468 Speaker 2: you so much. It wasn't an easy task. Thank you 488 00:27:31,489 --> 00:27:34,000 Speaker 2: so much. Thank you for having me and as always 489 00:27:34,010 --> 00:27:36,909 Speaker 2: a big thank you to you as well. Listener. If 490 00:27:36,920 --> 00:27:40,698 Speaker 2: you found this episode especially helpful, we would like to 491 00:27:40,709 --> 00:27:44,109 Speaker 2: know we're streaming on Apple podcasts, Google podcasts 492 00:27:44,204 --> 00:27:47,545 Speaker 2: and Spotify. We're also up on youtube music. So if 493 00:27:47,555 --> 00:27:50,625 Speaker 2: you have the time and you're listening to us from 494 00:27:50,635 --> 00:27:53,805 Speaker 2: any of these platforms, leave us a rating and a 495 00:27:53,814 --> 00:27:57,655 Speaker 2: comment for money talks. The team is Joanne Chan Tiffany 496 00:27:57,714 --> 00:28:01,795 Speaker 2: Ang Christina Robert, Juani Johari. S Ye win and I'm 497 00:28:01,805 --> 00:28:02,204 Speaker 2: Andrea Hing.