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Speaker 1: Let's get to Cameron brandt our guest. Cameron is director

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Speaker 1: of research at e M Portfolio Fund Research. He joins

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Speaker 1: from Massachusetts. It looks like we're seeing a little bit

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Speaker 1: of a reopening story in China and we've got a

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Speaker 1: rally in the offshore currency now on the strong side

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Speaker 1: of seven, Cameron, I mean, are you optimistic that we

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Speaker 1: have reached some type of inflection point as it relates

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Speaker 1: to the COVID situation UM. Well, certainly investors and fund

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Speaker 1: managers have been expecting this to happen. I unfortunately think

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Speaker 1: that there is a big variable in easing back the controls,

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Speaker 1: which is what happens when COVID isn't so tightly contained

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Speaker 1: in China. I think if the death toll really starts

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Speaker 1: to so sore, we'll see see those controls reimposed for

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Speaker 1: a while. Yeah, that's certainly been the experience elsewhere, supply

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Speaker 1: chain disruption, rising absentee ism. So with that in mind,

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Speaker 1: how do your position for the real UM The short

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Speaker 1: answer is that from our perspective, and we track a

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Speaker 1: universe of mutual funds, UM investors have already positioned themselves

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Speaker 1: since a lot of money come into UM China dedicated

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Speaker 1: China funds really for the past six months. Um So,

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Speaker 1: I think the main story is going to be if

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Speaker 1: the if the rollback stalls or even reverses. So when

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Speaker 1: the U S session on Friday, we had the Nasdack

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Speaker 1: Golden Dragon China Index up by nearly five and a

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Speaker 1: half percent. I'm wondering whether many market participants have been

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Speaker 1: short Chinese assets for such a long time given the

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Speaker 1: COVID situation that we really are not seeing a fundamental

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Speaker 1: shift in psychology so much as short covering. What do

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Speaker 1: you think of that? Um? I know, I think people

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Speaker 1: have been expecting that the code of the zero COVID

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Speaker 1: policy would have to give uh and trying to sort

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Speaker 1: of get in on the on the bottom rung. Um So,

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Speaker 1: I think, you know, the hope is that China represents

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Speaker 1: the great rebound story over the next few months, uh

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Speaker 1: and that people are going to be in a position

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Speaker 1: to benefit. Yeah. With that of mind, what's your growth

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Speaker 1: out look for China hitting into um? I you you know,

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Speaker 1: the new normal I think is going to struggle to

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Speaker 1: hit the five percent target that they've had in recent years.

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Speaker 1: I think there's a lot of catching up, a lot

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Speaker 1: of retooling to do this year, So I'm thinking next year,

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Speaker 1: assuming no COVID surprises around three. But I'm wondering whether

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Speaker 1: or not this has kind of given a lesson to

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Speaker 1: the market more broadly, or at least two corporations who

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Speaker 1: have done a lot of investing in China, whether it's

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Speaker 1: through their supply chains or production facilities outright, and with

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Speaker 1: the DISK that had been kind of maybe not anticipated

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Speaker 1: that we were going to see something uh so strict

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Speaker 1: and so long lasting, and how it's damaged business globally,

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Speaker 1: do you think that it's probably something where we're going

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Speaker 1: to see a lot more diversification outside of the mainland. Well,

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Speaker 1: we're certainly seeing investors position themselves for that. Outside of

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Speaker 1: dedicated China funds in the emerging markets universe, the ones

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Speaker 1: that have been attracting consistent interest are dedicated to the

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Speaker 1: countries you hear most often when people just discuss where

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Speaker 1: supply chains might be relocated. That's Vietnam, Mexico, and the Philippines. Yeah,

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Speaker 1: as are these good did your restrictions to look at now,

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Speaker 1: particularly with the U still that starting to weaken the

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Speaker 1: what sort of opportunities do they prevent present for investors. Um, well,

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Speaker 1: they still require I think a fairly strong, strong nerves

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Speaker 1: to head into UM. You know, certainly I would excuse

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Speaker 1: Mexico at the moment um, but certainly in the Philippines,

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Speaker 1: in Vietnam they do, I think see the opportunity. Um.

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Speaker 1: So I you know, those with the two that I

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Speaker 1: think probably the ones to focus on. Early. One of

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Speaker 1: the recent Bloomberg m Live surveys conducted found that fear

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Speaker 1: of stagflation was the biggest risk or the biggest worry.

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Speaker 1: How would you rank stagflation as as a risk for markets? UM, well,

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Speaker 1: I certainly think that inflation still has some legs um,

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Speaker 1: and you know, the measures to contain it are going

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Speaker 1: to hit growth. So UM. I certainly think in the

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Speaker 1: in the early part of the coming year, UM, we're

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Speaker 1: going to be looking at um, declining growth and wondering

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Speaker 1: why inflation is quite as durable as it may prove. Um.

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Speaker 1: I think it's uh one of the things that the

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Speaker 1: FED is trying to figure out as well. Cameron, thank

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Speaker 1: you so much for being with his Cameron Brandt, director

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Speaker 1: of research at Emerging Portfolio Fund Research here on Daybreak

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Speaker 1: Asia