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Speaker 1: Here the Duplessen Peter Lewis Asia Business corresponding with us

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Speaker 1: now Hi Peter.

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Speaker 2: Good evening headther So even.

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Speaker 1: More stimulus coming from China.

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Speaker 2: A huge amount of stimulus coming down the pipes, if

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Speaker 2: we believe the media reports something along the lines of

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Speaker 2: one point four trillion dollars to try and shore up

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Speaker 2: basically China's economy and also deal with all the debt

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Speaker 2: that's been accumulated by the local governments, particularly in the

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Speaker 2: property market. There needs to be a complete shakeup of

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Speaker 2: how local governments raise money because they can't raise it

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Speaker 2: from taxes on land sales anymore because the property developers

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Speaker 2: are either bankrupt or they've built too many houses already,

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Speaker 2: and there's far more houses that are unfinished than there

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Speaker 2: are people to live in them. So this stimulus is

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Speaker 2: going to be directed mainly at the local governments to

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Speaker 2: try and help them swap what is in effect local

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Speaker 2: government debts that's hidden off balance sheets with central government debt,

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Speaker 2: and the hope that this sort of unclogs the pipes

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Speaker 2: and starts getting money flowing again to local businesses because

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Speaker 2: there's lots of people who haven't been paid. There's suppliers

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Speaker 2: who haven't received their money either to try and get

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Speaker 2: that whole process up and running again, and Beijing is

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Speaker 2: relying very heavily on this to try and stimulate the economy.

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Speaker 2: I'm not so sure. I think what tends to happen

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Speaker 2: with things like this is they have a temporary boost,

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Speaker 2: particularly when you're borrowing a lot of money to try

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Speaker 2: and stimulate your economy, as maybe the UK is about

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Speaker 2: to find out. But that economic impact wears off very

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Speaker 2: very quickly unless you deal with the underlying fundamental problem.

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Speaker 2: And the underlying fundamental problem in China is very difficult

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Speaker 2: to deal with because of the demographics, because there are

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Speaker 2: far less people who want to buy homes at the moment,

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Speaker 2: So the whole property market is going to take many

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Speaker 2: years to be resolved, and it's going to take a

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Speaker 2: long time before prices start moving up again.

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Speaker 1: Yeah, how long do you reckon? I mean, if we're

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Speaker 1: talking about demographics where you have to wait for people

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Speaker 1: to want to buy houses, I mean you're talking about

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Speaker 1: potentially decades or a decade.

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Speaker 2: Yes, absolutely, I mean this could take many years to resolve.

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Speaker 2: We're not going to see house prices in the meantime.

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Speaker 2: Moved back to previous levels. The risk is that they're

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Speaker 2: actually going to move even lower in the meantime, And

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Speaker 2: we don't really know what is the true value of

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Speaker 2: these homes because the Chinese government won't let us find out.

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Speaker 2: They have a lot of controls whether or not local

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Speaker 2: authorities can raise or lower prices, whether the developments developers

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Speaker 2: can do that. So we don't really know what is

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Speaker 2: the clearing price of all this unfinished, unsold property in China.

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Speaker 2: All we do know is that there is way way

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Speaker 2: too much of it, and the clearing price, the true

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Speaker 2: price of these homes is probably a lot lower.

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Speaker 1: Yeah, very good point that you make there. Now listen,

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Speaker 1: tell me, how are you guys witnessing the US election?

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Speaker 1: What do people think of it?

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Speaker 2: Well, they're waiting with some trepidation for the results next week,

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Speaker 2: because all American elections tend to be consequential, but this

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Speaker 2: one is going to be more consequential than any we've

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Speaker 2: seen for quite a long time, particularly if Donald Trump wins.

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Speaker 2: I mean, here's the self proclaimed tariff man. He says,

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Speaker 2: tariff is the most beautiful word in the English language,

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Speaker 2: and we have to remember that it's threatening blanket tariffs

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Speaker 2: of twenty percent on all exports into the US and

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Speaker 2: sixty percent on Chinese ones. Now, if people think he's bluffing,

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Speaker 2: I think that he intends to carry this through. I

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Speaker 2: think he feels that one of these big mistakes when

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Speaker 2: he was last president was not having people around him

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Speaker 2: who were supportive enough of his agenda. So he doesn't

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Speaker 2: want to make that same mistake twice. He's throughound the

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Speaker 2: himself with people who are going to absolutely carry out

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Speaker 2: that agenda, and Harris is going to be a very

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Speaker 2: big part of that. So the risk is that this

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Speaker 2: could totally reorder the global trading system with consequences for

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Speaker 2: the global economy. The IMF says it could wipe out

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Speaker 2: the equivalent of the GDPs of France and Germany off

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Speaker 2: of global growth if he goes through with this, So

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Speaker 2: it is very consequential. He's already been attacking, and he

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Speaker 2: doesn't distinguish between friends and enemies. So Japan, for example,

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Speaker 2: which is trying to get around this problem by investing

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Speaker 2: an enormous amount in the US in terms of opening

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Speaker 2: plants there over the past years and decades, could be hit. Taiwan. Certainly,

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Speaker 2: he was accusing Taiwan over the weekend of stealing the

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Speaker 2: US chip business. He didn't explain how exactly Taiwan had

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Speaker 2: done that, but he said they've stolen basically American business

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Speaker 2: from companies like Intel and is going to put tariffs

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Speaker 2: on Taiwan's semiconductor or taiwan semiconductor manufacturing makes ninety percent

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Speaker 2: of the world's advanced chips has huge clients like Navidia, Apple, Microsoft,

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Speaker 2: So this would have enormous implications for the global supply

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Speaker 2: chain if he goes ahead with it.

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Speaker 1: Does China have a preference? Do you think as to

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Speaker 1: with it's Trump or Kamala who wins.

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Speaker 2: Well, that's what we've been wondering. It's hard to know

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Speaker 2: because Kamala Harris isn't going to be that much better

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Speaker 2: for China because that signals are more a continuation with

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Speaker 2: Biden's policy, and Biden has hardly been friendly to China.

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Speaker 2: Are there either mean some of his tariffs have been very,

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Speaker 2: very damaging to Chinese exporters and also damaging to China's

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Speaker 2: ability to develop its own high tech industry. So a

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Speaker 2: continuation of that is not going to be particularly good

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Speaker 2: for China. At the same time, it could get ramped

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Speaker 2: up in a very specific way in terms of a

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Speaker 2: lot more tariffs if Donald Trump is in power. So

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Speaker 2: we have been wondering what Beijing prefers. Of course we

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Speaker 2: don't know. They're not going to say, so we can

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Speaker 2: only speculate. But I think that they see this as

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Speaker 2: whoever wins, it's not going to be particularly good for Beijing.

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Speaker 1: No, probably not. Hey, Peter, thank you very much. Enjoy

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Speaker 1: the last weekend before the election. That's Peter Lewis, our

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Speaker 1: Asia Business correspondent. For more from Hither Duplasye Alan Drive,

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Speaker 1: listen live to news talks. It'd be from four pm weekdays,

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