1 00:00:00,200 --> 00:00:03,040 Speaker 1: Now keeping us on top of the latest in China's 2 00:00:03,080 --> 00:00:06,080 Speaker 1: economy is Dan Jog She's chief economist at hang Sing 3 00:00:06,160 --> 00:00:09,479 Speaker 1: Bank China. Great time to have you on the show. 4 00:00:09,960 --> 00:00:13,400 Speaker 1: You say that easing COVID restrictions is going to make 5 00:00:13,440 --> 00:00:18,000 Speaker 1: things worse before they get better. I think is that 6 00:00:18,079 --> 00:00:20,720 Speaker 1: because COVID cases are going to rise and that's gonna 7 00:00:20,720 --> 00:00:22,279 Speaker 1: be a problem, or do you think they're not doing 8 00:00:22,320 --> 00:00:27,639 Speaker 1: this right or that it's not gonna last well. As 9 00:00:27,640 --> 00:00:32,680 Speaker 1: the winter is approaching, um COVID cases will rise quite significantly, 10 00:00:33,120 --> 00:00:36,000 Speaker 1: and there is a concern that there might be a 11 00:00:36,080 --> 00:00:40,680 Speaker 1: hospital run in major cities in China. Uh and right 12 00:00:40,720 --> 00:00:43,800 Speaker 1: now there are also a lot of confusions on what 13 00:00:44,159 --> 00:00:49,120 Speaker 1: the real relaxations are because in places like Beijing and Shanghai, 14 00:00:49,600 --> 00:00:53,520 Speaker 1: supposedly we don't need a health code or COVID task 15 00:00:53,680 --> 00:00:56,560 Speaker 1: to get into public transportation, but if you want to 16 00:00:56,600 --> 00:01:00,840 Speaker 1: get into office buildings, it really usual they would require 17 00:01:00,880 --> 00:01:04,760 Speaker 1: twenty four hour our PCR test. So there's a lot 18 00:01:04,840 --> 00:01:07,480 Speaker 1: of inconsistency there. Yeah, and that's one of the questions 19 00:01:07,480 --> 00:01:10,080 Speaker 1: that I've been asking. It really is the degree to 20 00:01:10,160 --> 00:01:12,839 Speaker 1: which we could see the health care system in China 21 00:01:13,040 --> 00:01:16,520 Speaker 1: stress to a point that it nearly breaks. And what 22 00:01:16,640 --> 00:01:18,440 Speaker 1: you're saying is that that that that is a huge 23 00:01:18,560 --> 00:01:22,160 Speaker 1: risk right now. But for the government's credibility, which is 24 00:01:22,280 --> 00:01:24,920 Speaker 1: very much on the line. When you think about not 25 00:01:25,000 --> 00:01:28,600 Speaker 1: only what's happening domestically, the stress that people must be 26 00:01:28,760 --> 00:01:32,039 Speaker 1: under in these large cities, what they've endured for the 27 00:01:32,160 --> 00:01:35,720 Speaker 1: last three years, but the companies who are outside of 28 00:01:35,840 --> 00:01:38,760 Speaker 1: China trying to get a sense of how they can 29 00:01:38,800 --> 00:01:42,119 Speaker 1: conduct business within the mainland. I mean, this is going 30 00:01:42,120 --> 00:01:45,000 Speaker 1: to be confusing, not just domestically, but on the global 31 00:01:45,040 --> 00:01:51,840 Speaker 1: stage as well. Oh. Absolutely, when we talked to for investors, 32 00:01:52,040 --> 00:01:55,560 Speaker 1: be its in financial market or in the real economy, 33 00:01:55,720 --> 00:02:00,160 Speaker 1: especially in UH supply chains like new Enity vehicle all 34 00:02:01,160 --> 00:02:06,120 Speaker 1: it just seems that China's demand has been fundamentally weakened 35 00:02:06,720 --> 00:02:10,920 Speaker 1: and there are no aggressive rescue package similar to the 36 00:02:11,000 --> 00:02:15,720 Speaker 1: size of the two financial crisis um. And then for 37 00:02:15,800 --> 00:02:20,480 Speaker 1: the central government, now this is a transition period before 38 00:02:20,639 --> 00:02:23,600 Speaker 1: the new leaders are in place in the coming March. 39 00:02:23,720 --> 00:02:27,600 Speaker 1: During the two sessions, there wouldn't be any drastic policy 40 00:02:27,720 --> 00:02:32,600 Speaker 1: reversal um and we wouldn't get very clear policy signals either. 41 00:02:33,240 --> 00:02:37,440 Speaker 1: And for domestic investors, they are anxious to see when, 42 00:02:37,800 --> 00:02:41,760 Speaker 1: for example, the interest rate can be lowered, because for 43 00:02:41,840 --> 00:02:44,880 Speaker 1: many of them the liquidity is drying up with the 44 00:02:44,960 --> 00:02:49,519 Speaker 1: prolonged COVID lockdown. And for foreign investors there's also a 45 00:02:49,639 --> 00:02:54,639 Speaker 1: question on whether China is still welcome for investments in general. 46 00:02:55,160 --> 00:02:58,400 Speaker 1: You think that the property market is going to be 47 00:02:58,440 --> 00:03:00,600 Speaker 1: a source of growth this year, what do you see 48 00:03:00,600 --> 00:03:06,080 Speaker 1: happening there. The property market has been the pillar industry 49 00:03:06,280 --> 00:03:10,120 Speaker 1: for China in the past twenty years, and this year 50 00:03:10,639 --> 00:03:14,080 Speaker 1: it has been quite depressed. The housing sales has been 51 00:03:14,120 --> 00:03:19,720 Speaker 1: contracting for about thirty depending on the cities you're in, 52 00:03:20,440 --> 00:03:24,960 Speaker 1: and next year it just seems that the government is 53 00:03:25,200 --> 00:03:31,280 Speaker 1: eager to UM assemble this rescue package amounting to about 54 00:03:31,400 --> 00:03:34,440 Speaker 1: one to two trillion R and B, and those money 55 00:03:34,600 --> 00:03:37,520 Speaker 1: will not be, of course, all spent within one year. 56 00:03:37,560 --> 00:03:41,280 Speaker 1: It probably will be spreading over the three year period UM. 57 00:03:41,360 --> 00:03:44,320 Speaker 1: But it seems that most of those money will be 58 00:03:44,800 --> 00:03:50,280 Speaker 1: as a liquidity provision for the realistic developers UM. For 59 00:03:50,360 --> 00:03:55,360 Speaker 1: the demand side, there are a lot of pessimism about 60 00:03:55,840 --> 00:03:59,720 Speaker 1: when the housing market can really turn up. The consumers 61 00:03:59,800 --> 00:04:03,800 Speaker 1: and home bias really need some clear signal on whether 62 00:04:04,400 --> 00:04:07,480 Speaker 1: UM the COVID control will come to an end in 63 00:04:09,000 --> 00:04:12,560 Speaker 1: and right now that signal is not entirely clear um, 64 00:04:12,640 --> 00:04:16,040 Speaker 1: But for infrastructure spending in China it is coming to 65 00:04:16,080 --> 00:04:19,440 Speaker 1: an end. And for the only thing that still get 66 00:04:19,520 --> 00:04:22,919 Speaker 1: a momentum is probably housing. Yeah, I'm wondering Dan, very quickly, 67 00:04:22,960 --> 00:04:25,680 Speaker 1: in about forty seconds or so, do you think it's 68 00:04:25,680 --> 00:04:29,960 Speaker 1: possible that Beijing reverses itself on some of the measures 69 00:04:29,960 --> 00:04:33,440 Speaker 1: that we saw as it relates to consumer facing tech 70 00:04:33,520 --> 00:04:38,640 Speaker 1: companies that crackdown, could they relax restrictions a bit to 71 00:04:38,720 --> 00:04:42,880 Speaker 1: allow the industry to resuscitate or to be resuscitated as 72 00:04:42,880 --> 00:04:47,000 Speaker 1: a way of driving growth very quickly. Oh, the signal 73 00:04:47,360 --> 00:04:51,000 Speaker 1: is not entirely clear yet. But for the gaming companies 74 00:04:51,120 --> 00:04:54,240 Speaker 1: there are some welcoming signs. For example, some of the 75 00:04:54,320 --> 00:04:59,000 Speaker 1: games by Tensent got improved. Um. But I don't think 76 00:04:59,000 --> 00:05:02,880 Speaker 1: it's the end of the regulation yet. For internet companies, 77 00:05:03,000 --> 00:05:06,039 Speaker 1: they still need to wait before the two sessions we 78 00:05:06,080 --> 00:05:09,840 Speaker 1: can really be sure. All right. Well, Dan Wong, chief 79 00:05:09,880 --> 00:05:12,640 Speaker 1: economist at Hangsang Bang China, thank you so very much 80 00:05:12,640 --> 00:05:16,360 Speaker 1: for your insights, particular review of how slow the turn 81 00:05:16,480 --> 00:05:20,240 Speaker 1: away from COVID zero. Maybe as cases spike of covid 82 00:05:20,520 --> 00:05:21,080 Speaker 1: this winter