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Speaker 1: Let's talk about the China reopening story, how disorderly, how

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Speaker 1: quickly it might be. Louick Houses, chief apack economist at

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Speaker 1: SMP Global Ratings, joining us from Sydney. So this recent

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Speaker 1: commentary that Brian was just talking us through, they're certainly

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Speaker 1: being seen as a positive that we will start to

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Speaker 1: see some easing of these very strict COVID zero restrictions.

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Speaker 1: What impact does that have on China's growth? For yeah, Julieah,

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Speaker 1: So clearly, you know, it's going to probably get even

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Speaker 1: a little worse before it gets better, in the sense

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Speaker 1: that this is not going to be some very easy

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Speaker 1: trajectory to a beautiful future. But I do think that

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Speaker 1: you know, um, come the second half of the year especially,

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Speaker 1: we will start to have seen that, you know, businesses,

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Speaker 1: people have become more comfortable in the future, become more

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Speaker 1: comfortable that they can go out spend and live like

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Speaker 1: like normal confidence regimes. So clearly this is going to

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Speaker 1: be a benefit for growth second half of next year

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Speaker 1: to talk twenty four and and you know, for the

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Speaker 1: economy in the coming year. So Louis, do these relaxations

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Speaker 1: and restrictions do they need to be met with a

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Speaker 1: policy response on the monetary side as well, or is

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Speaker 1: it sufficient just to have the economy slowly reopen and

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Speaker 1: hope for the best. I think, you know, um, the

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Speaker 1: COVID stands has been such a constraint on everything that

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Speaker 1: it should be sufficient by itself. The lifting of those

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Speaker 1: measures will have you know, should have a significant inderviride themselves. Actually,

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Speaker 1: the you know, things like the monetary stands have been

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Speaker 1: in principle quite you know, constructive, supportive to growth, but

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Speaker 1: nobody wants to borrow when you know when when confidence

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Speaker 1: this week because of COVID. So I think this this

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Speaker 1: is the binding constraint or if you can lift it,

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Speaker 1: it will be good for the equalm. You make some

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Speaker 1: interesting points about productivity and living standards in China too,

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Speaker 1: and I wonder how much they have been impacted by

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Speaker 1: these lockdowns in nearly three years of these very strict conditions. Yeah,

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Speaker 1: you know, so we really re released a piece on

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Speaker 1: the longer term outlook for China, and of course, you know,

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Speaker 1: what has happened in recent years has been hugely impactful

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Speaker 1: in many ways. To what extent does it really change

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Speaker 1: the longer term picture? And are you when you look

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Speaker 1: at you know, what is going to impact China's living

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Speaker 1: standards and productivity levels. It's all about these things like demographics, um,

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Speaker 1: also the rebalancing of the pattern of growth, you know,

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Speaker 1: towards more consumption and service sector, and very importantly also

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Speaker 1: these relationships with the US and what it means for

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Speaker 1: economic interaction with the outside world. So, Louish, I know

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Speaker 1: that you're an economist by trade, but I'm going to

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Speaker 1: throw you kind of a market oriented question on the

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Speaker 1: less as it relates to credit. I mean, if we

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Speaker 1: can assume that the growth rate, the trajectory of improvement

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Speaker 1: is going to be very very slow, steady perhaps, but slow,

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Speaker 1: is there the risk that there may be some stress

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Speaker 1: in the credit system outside of the property segment. You

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Speaker 1: mean stress in terms of not enough credit I'm just

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Speaker 1: or just the risk of default. I mean, if you're

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Speaker 1: credit servicing, the issues that the credit market it grapples

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Speaker 1: with all the time. Well, you know that has already

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Speaker 1: been an issue right for for quite a few same

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Speaker 1: s other uh companies that have really been squeezed by

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Speaker 1: by these bodies, lockdowns and the lack of customers. So

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Speaker 1: that is continuing to be an issue the you know,

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Speaker 1: the the credit profile and and really the balance sheets

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Speaker 1: of many types of companies. They have been under pressure

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Speaker 1: now and so the longer that it takes, the more

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Speaker 1: that that pressure was talked to accumulate. So the Chin

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Speaker 1: of reopening story is going to boost the globe basically

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Speaker 1: where though elsewhere in Asia are you looking for some

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Speaker 1: some positivity? I mean, have you changed any of your ratings?

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Speaker 1: So I'm not in charge of ratings, but I'm in

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Speaker 1: charge of the of the economic outlook. So if we

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Speaker 1: if we look at the economic outlook, you know clearly

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Speaker 1: who is going to benefit from the China opening up

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Speaker 1: other than China itself. It's those economies that that interact

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Speaker 1: a lot with it trade investments, so Hong Kong should

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Speaker 1: benefit from it. The region generally will benefit from it.

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Speaker 1: This region, you know, is actually not interuching bad spot.

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Speaker 1: If you look at you know, um, the US and Europe,

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Speaker 1: we think will slow down to basically very little growth

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Speaker 1: next year in this region. The opening up of China

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Speaker 1: is one of the reasons why we are a bit

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Speaker 1: more you know, a bit more optimistic about growth that

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Speaker 1: that was. So we do expect to slow down, but

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Speaker 1: we don't uh, you know, think growth will grind to

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Speaker 1: a halt in this region. Lolli good does stuff. Thank

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Speaker 1: you so much for being with us. Louis Kosi is

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Speaker 1: the Chief a pack economist at SNP Global Ratings, Joining

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Speaker 1: from Sydney here on Daybreak Asia