Speaker 1: Now keeping us on top of the latest in China's
Speaker 1: economy is Dan Jog She's chief economist at hang Sing
Speaker 1: Bank China. Great time to have you on the show.
Speaker 1: You say that easing COVID restrictions is going to make
Speaker 1: things worse before they get better. I think is that
Speaker 1: because COVID cases are going to rise and that's gonna
Speaker 1: be a problem, or do you think they're not doing
Speaker 1: this right or that it's not gonna last well. As
Speaker 1: the winter is approaching, um COVID cases will rise quite significantly,
Speaker 1: and there is a concern that there might be a
Speaker 1: hospital run in major cities in China. Uh and right
Speaker 1: now there are also a lot of confusions on what
Speaker 1: the real relaxations are because in places like Beijing and Shanghai,
Speaker 1: supposedly we don't need a health code or COVID task
Speaker 1: to get into public transportation, but if you want to
Speaker 1: get into office buildings, it really usual they would require
Speaker 1: twenty four hour our PCR test. So there's a lot
Speaker 1: of inconsistency there. Yeah, and that's one of the questions
Speaker 1: that I've been asking. It really is the degree to
Speaker 1: which we could see the health care system in China
Speaker 1: stress to a point that it nearly breaks. And what
Speaker 1: you're saying is that that that that is a huge
Speaker 1: risk right now. But for the government's credibility, which is
Speaker 1: very much on the line. When you think about not
Speaker 1: only what's happening domestically, the stress that people must be
Speaker 1: under in these large cities, what they've endured for the
Speaker 1: last three years, but the companies who are outside of
Speaker 1: China trying to get a sense of how they can
Speaker 1: conduct business within the mainland. I mean, this is going
Speaker 1: to be confusing, not just domestically, but on the global
Speaker 1: stage as well. Oh. Absolutely, when we talked to for investors,
Speaker 1: be its in financial market or in the real economy,
Speaker 1: especially in UH supply chains like new Enity vehicle all
Speaker 1: it just seems that China's demand has been fundamentally weakened
Speaker 1: and there are no aggressive rescue package similar to the
Speaker 1: size of the two financial crisis um. And then for
Speaker 1: the central government, now this is a transition period before
Speaker 1: the new leaders are in place in the coming March.
Speaker 1: During the two sessions, there wouldn't be any drastic policy
Speaker 1: reversal um and we wouldn't get very clear policy signals either.
Speaker 1: And for domestic investors, they are anxious to see when,
Speaker 1: for example, the interest rate can be lowered, because for
Speaker 1: many of them the liquidity is drying up with the
Speaker 1: prolonged COVID lockdown. And for foreign investors there's also a
Speaker 1: question on whether China is still welcome for investments in general.
Speaker 1: You think that the property market is going to be
Speaker 1: a source of growth this year, what do you see
Speaker 1: happening there. The property market has been the pillar industry
Speaker 1: for China in the past twenty years, and this year
Speaker 1: it has been quite depressed. The housing sales has been
Speaker 1: contracting for about thirty depending on the cities you're in,
Speaker 1: and next year it just seems that the government is
Speaker 1: eager to UM assemble this rescue package amounting to about
Speaker 1: one to two trillion R and B, and those money
Speaker 1: will not be, of course, all spent within one year.
Speaker 1: It probably will be spreading over the three year period UM.
Speaker 1: But it seems that most of those money will be
Speaker 1: as a liquidity provision for the realistic developers UM. For
Speaker 1: the demand side, there are a lot of pessimism about
Speaker 1: when the housing market can really turn up. The consumers
Speaker 1: and home bias really need some clear signal on whether
Speaker 1: UM the COVID control will come to an end in
Speaker 1: and right now that signal is not entirely clear um,
Speaker 1: But for infrastructure spending in China it is coming to
Speaker 1: an end. And for the only thing that still get
Speaker 1: a momentum is probably housing. Yeah, I'm wondering Dan, very quickly,
Speaker 1: in about forty seconds or so, do you think it's
Speaker 1: possible that Beijing reverses itself on some of the measures
Speaker 1: that we saw as it relates to consumer facing tech
Speaker 1: companies that crackdown, could they relax restrictions a bit to
Speaker 1: allow the industry to resuscitate or to be resuscitated as
Speaker 1: a way of driving growth very quickly. Oh, the signal
Speaker 1: is not entirely clear yet. But for the gaming companies
Speaker 1: there are some welcoming signs. For example, some of the
Speaker 1: games by Tensent got improved. Um. But I don't think
Speaker 1: it's the end of the regulation yet. For internet companies,
Speaker 1: they still need to wait before the two sessions we
Speaker 1: can really be sure. All right. Well, Dan Wong, chief
Speaker 1: economist at Hangsang Bang China, thank you so very much
Speaker 1: for your insights, particular review of how slow the turn
Speaker 1: away from COVID zero. Maybe as cases spike of covid
Speaker 1: this winter