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Speaker 1: Let's get to our guests defon who regional c I

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Speaker 1: O and apack macro economics head at ubs global wealth management. Well,

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Speaker 1: a number of issues that China is facing. Obviously these

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Speaker 1: further lockdowns, that's probably the biggest one at the moment,

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Speaker 1: but also the property crisis seems to be casting a

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Speaker 1: little bit of a weight on on the country's economy

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Speaker 1: and geopolitical tensions. Just overall, your thoughts here this morning,

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Speaker 1: ifn on on the health of the Chinese economy. For

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Speaker 1: the Chinese economy is improving from the like h the

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Speaker 1: second quarter, so we should have put this way the

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Speaker 1: worst past. However, the real bonding road as a bumping

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Speaker 1: so now currently we see for the consumptions are picking up,

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Speaker 1: however because of the resurgence of the COVID restricting, so

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Speaker 1: I think it's a slowing down a little bit again.

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Speaker 1: And also for the investment side, especially for the manufacturing

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Speaker 1: as acquired manufacturing infrastry infrastructure should be resilient partially offsetting

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Speaker 1: the declining of the property investment, So exports is also

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Speaker 1: slowing down. So as a whole, and always think that

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Speaker 1: it's ah, we we put it a you shape. Recovery

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Speaker 1: with a bumping road, but still it's a recovery from

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Speaker 1: the second quarter, so the worst past. How much do

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Speaker 1: we see a more meaningful recovery and perhaps a pivot

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Speaker 1: away from dynamic COVID after the Party Congress, we think

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Speaker 1: the China probably will continue it's a zero COVID UH policy.

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Speaker 1: However the implementation will be much more flexible. So currently

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Speaker 1: we see like from the overall direction, I think the

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Speaker 1: government is already like a more relaxed like you will say,

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Speaker 1: like how for the allow the apex card holders to

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Speaker 1: visit China and also like foreigners with students visa can

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Speaker 1: like and China. And also the quarantine period like a

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Speaker 1: shortened to seven plus three from the fourteen days. So

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Speaker 1: we see the overall direction, it's like how um inclined

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Speaker 1: to more opening, but we just think like before the

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Speaker 1: Party Congress, like it's still quite tight, but we think

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Speaker 1: there should be more relaxed after the political pressure is

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Speaker 1: gradually alleviated. If on how far along are the provinces

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Speaker 1: in pulling forward some of the bond sales from next

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Speaker 1: year into this year, uh for from the province siow

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Speaker 1: uh like a level, I think that it's UH for

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Speaker 1: for for the like currently with the COVID like more

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Speaker 1: like our restrictions for the bound bound side. UH. Your view,

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Speaker 1: the LGFP will continue to UH, probably issuing the Hong

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Speaker 1: Kong market, but it's UH. I think the overall market

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Speaker 1: is UH. It's not like a very enthusiastic like for

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Speaker 1: the bond. So we think there's a stew like issues,

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Speaker 1: but the overall the volume actually is quite muted. We're

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Speaker 1: continuing to see weakness in the one and efforts by

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Speaker 1: the PBOC to stem this. Meanwhile, OBC reporting that Russian

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Speaker 1: banks preferred China's yuan as the main alternative the payments

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Speaker 1: in dollars and euros. When it comes to the currency,

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Speaker 1: what are the implications of geopolitics and of course the

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Speaker 1: strong dollar weighing on the overall weakness of the one

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Speaker 1: currently because of the strong dollar, I think it's a

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Speaker 1: kind of the general depreciation like against a dollar. So

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Speaker 1: I think that the China is has no exception. So

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Speaker 1: we expect for the U, S, D C N Y

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Speaker 1: could overshoot seven UH like a till to the year end,

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Speaker 1: but it will gradually back to like a six point

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Speaker 1: time by next March. So for Jill particularly and for

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Speaker 1: the I think like how the China is UH has

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Speaker 1: been like how continuously promote the RMB internationalized issue. I

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Speaker 1: think that will continue work on this way. Actually, like

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Speaker 1: even before that your pretty conflict, the China is already

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Speaker 1: tried to use more R and B and to like

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Speaker 1: how to pay the commodity like always a Russia with

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Speaker 1: a Saudi Arabia. So I think that's not something new.

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Speaker 1: But now I think that of course, like how for

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Speaker 1: the loop and UH, like R and B will become

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Speaker 1: like a to the the two currencies and the two

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Speaker 1: in the like UH in the this kind of the

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Speaker 1: oil deals. So I think that will be the trend

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Speaker 1: probably the China is it's like energy partners like going forward.

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Speaker 1: When we look at the challenges in China, it's kind

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Speaker 1: of hard to figure out what the catalyst might be

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Speaker 1: for that you that you were talking about for it

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Speaker 1: to swing up on the right side. What's the catalyst

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Speaker 1: that is? It? Is it really just COVID Is that

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Speaker 1: the main factor at the moment. I think there's several catalysts.

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Speaker 1: I could the sub rise three and the first I

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Speaker 1: think for the for the investment side, we say for

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Speaker 1: the infrastructure investment and also manufacturing investment is still quite resilient.

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Speaker 1: So this year we already issue the three point six

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Speaker 1: five tilling of the LGB the local gumed bonds, and

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Speaker 1: I think they have to be used out right, so

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Speaker 1: we think that that will keep the infrastructure investment still resilient.

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Speaker 1: For the second, for the rest of the month. The second,

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Speaker 1: I think that it's a consumption. Consumption is still a

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Speaker 1: weak is uh recovering as improving, but I think still

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Speaker 1: takes time. So in our view, and we see the

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Speaker 1: August actually it's quite a good rebond, it's all. It's

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Speaker 1: already we see like how for the services level, it's

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Speaker 1: already to the top ninety level. However, with a resurgence

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Speaker 1: of COVID, so that one actually the COVID policy matters

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Speaker 1: a lot, so hopefully at or improve after the Party Congress.

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Speaker 1: What about the attractiveness of investing in China, You don't

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Speaker 1: think Chinese equities now cannot perform the rest of their

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Speaker 1: Asian peers. M I think that we currently think it's

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Speaker 1: a neutral, so that means like uh, but just like

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Speaker 1: we are waiting for the good momentum for the China's

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Speaker 1: market to repond so for economically we need the same

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Speaker 1: more like a clear science of like a consumption like

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Speaker 1: a recovery. And also hopefully more like the government supportive

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Speaker 1: policy will be announced after the Party Congress. And also

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Speaker 1: I think for the market side. Market side, I think

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Speaker 1: for the corporate earnings, I think that probably have to

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Speaker 1: pick up to give the more confidence, like to the investors. Briefly,

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Speaker 1: from an investor's standpoint in China, where's the best value

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Speaker 1: at the moment? I think currently I think to one

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Speaker 1: thing for the Chinese like economy is still UH the

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Speaker 1: worsest pass so it's a recovery. So I think this

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Speaker 1: year could below like an expectation of the UH five

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Speaker 1: point five and thinking it's around like as three percent

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Speaker 1: of the growth. But the next year we still expect

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Speaker 1: like a five percent of the growth. So that's actually

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Speaker 1: very different from the direct economist because currently I think

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Speaker 1: the fear of the recessions like for the US and

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Speaker 1: the Europe, I think it's a like the hot topics.

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Speaker 1: So I think that's actually makes China is different like

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Speaker 1: from the rest of the world. All right, you find

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Speaker 1: great to have you on, thank you, you find who

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Speaker 1: regional c io and apex macro economics heat that ubas

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Speaker 1: global wealth management