Speaker 1: Media, China Cham and Duncan Clark joins me here on
Speaker 1: the Singapore State at the New Economy Forum. I mean,
Speaker 1: we've been listening there to the fact that Donald Trump
Speaker 1: has formerly entered the U s presidential race and also
Speaker 1: ed talking about China and Russia. We sort of thought
Speaker 1: we might have an off framp between US China tentions
Speaker 1: to with that meeting between presidents Biden and she. How
Speaker 1: are you sort of landscaping the geopolitical landscape. Yeah, so
Speaker 1: obviously the meeting didn't go badly in the sense that
Speaker 1: it was cordial, but it doesn't really address the deeper issues.
Speaker 1: It's maybe when you can call it some sort of botox,
Speaker 1: if you will, for a situation where there's there's a
Speaker 1: lot of a lot of pressure under the surface there
Speaker 1: obviously from the technology war that you described, the trade war.
Speaker 1: Interesting that you just mentioned if it's true that Trump
Speaker 1: is formally declaring I mean this is was kicked off
Speaker 1: really formerly by him, although Obama had, you know, ramped
Speaker 1: up the pressure on China. But it's the one area
Speaker 1: that the GOP and the Dems really agree on. It
Speaker 1: is just maintaining pressure on China, so that won't change
Speaker 1: either way. So it's it's an interesting thing. That's the
Speaker 1: only thing that they can agree on at this China pressure. Yeah, absolutely,
Speaker 1: but we're continuing to see the US China tech war
Speaker 1: as well. It's kind of a matter of who's going
Speaker 1: to blink first here too. It is I mean, you know,
Speaker 1: we can talk about lose lose versus win win, which
Speaker 1: perhaps we've lived in before. Um So, there's costs on
Speaker 1: both sides for this. Uh So it's more of a
Speaker 1: game of chicken in terms of who can maintain the pain.
Speaker 1: And as we look at the semi conductor sector, we
Speaker 1: see the pain ramping up over time for China. Of course,
Speaker 1: it's also ramping up for US providers of capital, equipment
Speaker 1: and other participants. But from a strategic standpoint in China
Speaker 1: that's truly facing a big challenge. Sheeting Ping has clearly
Speaker 1: enunciated his belief in indigenous innovation, the China's capacity to
Speaker 1: innovate independently of the US and perhaps others, And so
Speaker 1: that's the big bet. Will this bet payoff? Throwing lots
Speaker 1: of money at the problem, will it be successful? There's
Speaker 1: a lot of investor hope and optimism to the perhaps
Speaker 1: the regulatory crackdown can potentially come to an air. What
Speaker 1: is next then after the tech crackdown? And I guess,
Speaker 1: how do we look at China tich right, And it's
Speaker 1: perhaps instructives. Look at the property sectors. You've seen the
Speaker 1: real estate developers have been hammered in China, uh and
Speaker 1: seems like some easing over the last few days, extension
Speaker 1: of certain deadlines of those policies. So perhaps that's precursor
Speaker 1: to doing the same thing for tech, saying, you know,
Speaker 1: the consequences of a downtown in the property sector, like
Speaker 1: in the tech sector, is is pretty damaging, particularly when
Speaker 1: you're maintaining the zero COVID or blanket overall, I kind
Speaker 1: of make activity in China, So I think, you know,
Speaker 1: we're probably the over the worst for the anti tech crackdown.
Speaker 1: But the fundamental issue there remains, if they're private sector
Speaker 1: tech companies in China, how does the government view them?
Speaker 1: And we saw that famously with ant group the Ali
Speaker 1: Baba spinoff two years ago without aborted I p O.
Speaker 1: I think there is clear tension between the Communist Party
Speaker 1: and the state on one hand, and these private sector
Speaker 1: players getting too big if they can reach a new accommodation,
Speaker 1: over control of data, over the sheer power of some
Speaker 1: of these companies, which is a global problem. I mean,
Speaker 1: look at tick Off, the debate about how powerful that is.
Speaker 1: In China too, there's a debate about how big is
Speaker 1: big tech, but it has a different flavor because of
Speaker 1: the private sector element. China needs to figure out are
Speaker 1: they going to allow private sector companies to become dominant
Speaker 1: in certain years? If not, can they replace them? You
Speaker 1: know you do? Sorry, excuse me, focus a quite closely
Speaker 1: on Ali Barbera. I believe you have written a book
Speaker 1: on Ali Baba as well. We know we're looking at
Speaker 1: their earnings coming through tomorrow. Eleven eleven won't be reflected
Speaker 1: in that not not a great shopping day for Ali Baba.
Speaker 1: But but what happens to turn the consumer sentiment around here? Yeah,
Speaker 1: so there's the number one thing is zero COVID. I
Speaker 1: mean it is you know, if we see some maybe
Speaker 1: Swiss Cheese approach to zero COVID. Now we're seeing certain governments,
Speaker 1: local governments, not perhaps full the implementing, but we see uh,
Speaker 1: you know, unrest. I think that this morning in Guangdo,
Speaker 1: for example, where people are just fed up with us.
Speaker 1: You know, I've been in and out of China on
Speaker 1: and after the last two years. It is a painful
Speaker 1: existence with the daily testing and the sort of uncertainty,
Speaker 1: And it does seem there are signals now also reducing
Speaker 1: quarantine for people coming in, you know, changing some of
Speaker 1: the mechanics. Also, the sheer cost of maintaining the zero
Speaker 1: COVID policy is stunning. I mean, the testing, the the
Speaker 1: economic impact. So I think we're beginning to even though
Speaker 1: they're maintaining the policy. I think we're gonna we're gonna
Speaker 1: switch cheese our way out of this over time. Yeah,
Speaker 1: it seems they're looking for an off ramp, But isn't
Speaker 1: it when they're starting to slowly reduce some of those restrictions.
Speaker 1: We've seen that twenty point plan as well. But when
Speaker 1: you say you're going to unswervingly commit to COVID zero,
Speaker 1: it's kind of hard to find that off roum. When
Speaker 1: do you actually see a form reopening of China. Well,
Speaker 1: some of it may be linked to vaccines, and again
Speaker 1: this goes back to the indigenous innovation question. China has
Speaker 1: been hoping that they can develop their own MR and
Speaker 1: A vaccines from against state driven players rather than licensing
Speaker 1: from same Madonna or Beyond Tech fiser as we've seen,
Speaker 1: and again this anathema of having to work with private
Speaker 1: sectors in China like Fu Soon, which had licensed Beyond
Speaker 1: Tech for China, versus this dream of the state being
Speaker 1: able to solve this problem. It's it's a question of
Speaker 1: I had to say that really cliche, but face the
Speaker 1: idea that a private sector of a foreign player is
Speaker 1: going to solve this problem. I think that the costs
Speaker 1: just mounting day by day, and so I think there'll
Speaker 1: be some accommodation for some sort of licensing. There was
Speaker 1: some discussion with the Chancellor Shortz's visit of some license
Speaker 1: or some availability of vaccines to foreigners in China, but
Speaker 1: that's the way out of this, I think formerly because
Speaker 1: you obviously China is vulnerable otherwise, with an elderly population
Speaker 1: with limited rural healthcare, they can't just open the gates
Speaker 1: to COVID. When we look at when we look at
Speaker 1: the steep slowdown in China though, I mean, there's so
Speaker 1: many factors really affecting the geopolitical landscape. And we've been
Speaker 1: talking about the war in Ukraine, We've been talking about
Speaker 1: the increased pressure from Russia as well, and of course
Speaker 1: as global inflation too. But does China's steep slowdown is
Speaker 1: that one of the biggest impacts to the overall health
Speaker 1: of the global economy. Well, strangely, if you think about it,
Speaker 1: the zero COVID is actually repressing consumption and we have
Speaker 1: more deflation in China. So one could argue that actually,
Speaker 1: by China going out of zero COVID you would actually
Speaker 1: perhaps see some inflationary impressures which would worsen the global
Speaker 1: inflationary pictures. So at the moment, China is just a
Speaker 1: very isolated situation. Reintegrating with the global economy is going
Speaker 1: to take time, and it conferences like this, it's quite
Speaker 1: apparent that the Chinese delicates are here, are are kind
Speaker 1: of witnessing the fact that Chinese is not really very
Speaker 1: present in terms of lots of debates in business investment,
Speaker 1: investment flows beginning to go elsewhere, Supply chains are reforming
Speaker 1: around China, and you know, the question is it's trying
Speaker 1: to really fully committed to this you know, isolation or
Speaker 1: to this separation of the domestic economy and the international economy.
Speaker 1: And if they're not, they need to start beginning to
Speaker 1: make moves. I think they're beginning to look at opening up.
Speaker 1: It's going to take time. In twelve months time a
Speaker 1: US China relations better or worse. And does that is
Speaker 1: that impacted by whether or not we do see Donald
Speaker 1: Trump as the Republican candidate. Yeah, I think the Trump
Speaker 1: that's an interesting question, the analysis on that. I mean,
Speaker 1: I think obviously the strong performance of the Democrats just
Speaker 1: recently probably came as a bit of surprise to the
Speaker 1: Chinese authorities, as did too many people that that going
Speaker 1: into Bali, Biden is a much stronger player than they
Speaker 1: had expected, potentially going beyond two years. Of course, they're
Speaker 1: making that calculation. So a year from now, you know,
Speaker 1: we're still going to be a year out from the presidentials.
Speaker 1: It's still going to be unclear. I mean, I guess
Speaker 1: the biggest factor will be events. Does anything happen with
Speaker 1: regarding Taiwan, either statements on the Times government side or
Speaker 1: the US side that or an accident that that precipitates
Speaker 1: a crisis. Um, the hope is that this meeting you
Speaker 1: know yesterday is reduced the temperature of it, but it
Speaker 1: can easily flare up again. So it's still a very
Speaker 1: precarious situation. Indeed, we thank you so much for your time.
Speaker 1: Vid A China Chairman Duncan Clark with me here at
Speaker 1: the Bloomberg New Economy Forum in Singapore,