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Speaker 1: Let's get to our guests, Fan Chukuan, who's a g

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Speaker 1: c I O at HSBC Global Private Banking and Wealth. Fan,

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Speaker 1: thanks very much for joining us here and in our studios.

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Speaker 1: That's always great. Boy. I need to layout sort of

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Speaker 1: a complicated big picture question for you. Um, we're sort

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Speaker 1: of living through with what we see in China property

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Speaker 1: the crisis there. What happens when you over stimulate. I

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Speaker 1: think it was ten of GDP that China rolled out

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Speaker 1: in UH during the GFC, and in a sense we're

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Speaker 1: seeing a little bit of that setting in in the

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Speaker 1: United States. This is this is a mess that the

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Speaker 1: FED is trying to clean up now with inflation running

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Speaker 1: this hot. So here we are, what fourteen years later

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Speaker 1: than what happened in the GFC and China and still suffering.

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Speaker 1: Is the US going to go through that fourteen years

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Speaker 1: of of maybe too much easy money? Yeah? I think

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Speaker 1: this is um the number one question Matt in investors

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Speaker 1: mine offence them policy tightening in incruding the quantitative tightening

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Speaker 1: that has been happening, and I think this will underpind

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Speaker 1: market motility to stay UM. But I would see this

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Speaker 1: as a necessary policy normalization, and I think that the

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Speaker 1: key challenge for the FAT is to restore credibility in

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Speaker 1: taming inflation. So I think at the upcoming Jackson Hole

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Speaker 1: we will likely see a strong re iteration by a

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Speaker 1: chair pal that UM the Central Bank would be fully

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Speaker 1: committed to continue with the policy tightening in order to

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Speaker 1: fight inflation. UH. And these would actually UM bring a

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Speaker 1: investor repositioning momentums to persist UH in the coming months. UM.

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Speaker 1: But talking talking about the comparison of them U US

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Speaker 1: that halbrom as compared with the situation during the Group

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Speaker 1: of financial crisis in year two thousand eight, I think

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Speaker 1: we have already scenes are quite substantial a clean up

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Speaker 1: in the balance sheet of financial institutions. So we actually

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Speaker 1: see a limited systemic risk in the U S system.

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Speaker 1: So UH, even with a growth slow down in the

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Speaker 1: US economy that have caused a big concern in the market,

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Speaker 1: we actually see UM the risk of a full threat

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Speaker 1: US recession UM still remain limited because we still have

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Speaker 1: quite a strong labor market. US consumer spending outlook still

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Speaker 1: remain relatively receilient. They at once out of time, but

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Speaker 1: just very quickly you think that inflation perhaps may have

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Speaker 1: paid I think headline inflation in the US seems to

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Speaker 1: have picked as reflected by the jewel I US headline

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Speaker 1: cp A CPI number. But now the key challenge is

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Speaker 1: core infrasion because we continue to see sharp increase in

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Speaker 1: rents and wage growth continue to stay strong. Let's talk

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Speaker 1: more about what we're seeing from authorities in China to

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Speaker 1: really try to stimulate the economy and whether it's enough

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Speaker 1: when you see economic data suggesting that perhaps policies aren't

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Speaker 1: fading through yet. Yeah, I think the latest PBOC rate card,

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Speaker 1: together with the liquidity support and special loans for them

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Speaker 1: property developers, is a positive UH and the essential move.

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Speaker 1: But this is actually long awaited and and much necessary

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Speaker 1: because of the latest July China high frequency data and

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Speaker 1: the credit data showed quite a substantial UM deceleration in

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Speaker 1: growth momentum and the property sector Dunkton UH continue to

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Speaker 1: persist and this have spilled over effect to the broader

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Speaker 1: construction related sector. So we expect um there would be

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Speaker 1: further monetary yeasing actions from the PBOC are including um

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Speaker 1: the expected reserve requirement racial cuts in the coming months.

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Speaker 1: There could be further policy rate cut. But now I

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Speaker 1: think that the key challenge for the property sector is

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Speaker 1: not just the cost of funding um so. After the

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Speaker 1: mortgage rate cut earlier this year, UM, we haven't seen

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Speaker 1: any um material stabilization in the property sector are mainkly

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Speaker 1: because of confidence issue. So I think so so, so

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Speaker 1: let me ask Iman, given that would you not consider

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Speaker 1: investing there? Would you look for other areas? And you

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Speaker 1: say you like quality structural winners that are being driven

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Speaker 1: by government policy. So those two, those two areas, thank you.

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Speaker 1: We stay neutral on China equities are and remain cautious

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Speaker 1: on China property stock and popular high youth bonds. So

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Speaker 1: we want to see further decisive policy stimulus action in

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Speaker 1: order to stabilize UM that the confidence of the homebuias

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Speaker 1: um so, at least, I think the government need to

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Speaker 1: come up with resolutions to address the mortgage boycott issues

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Speaker 1: UH and this is related to the problem of the

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Speaker 1: unfinished property unit UM so, here we get these special

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Speaker 1: loans of facilities to help developers at least to complete

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Speaker 1: UH those store projects. On the other hand, I think um,

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Speaker 1: given the size and diversity in the Chinese economy, we

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Speaker 1: are still managed to identify um attractive investment opportunities. After

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Speaker 1: the market underperformed the regional and global benchmark on there

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Speaker 1: today basis, so we continue to position in the investment

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Speaker 1: led a RECOVERYE winners are particularly related to our investment

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Speaker 1: in infrastructure, including green and digital infrastructure place UH and

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Speaker 1: there there have been a continuous strong policy support for

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Speaker 1: the green transformation and this have been reflected in the

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Speaker 1: positive growth data in the infrastructure related investment Chakuan, Why

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Speaker 1: do you like Taiwan, career and Indonesia? UH? Currently we

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Speaker 1: are equally state neutral on Indonesia, Taiwan and Singapore UM

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Speaker 1: and our most prefirmed equity market in Asia actually Hong

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Speaker 1: Kong Local Hong Kong Equities and Thailand as we think

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Speaker 1: the reopening trend in both economy will continue to support

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Speaker 1: performance UH in both a stock market UM and for Taiwan,

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Speaker 1: I think the key challenge is the significant slowdown in

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Speaker 1: the semi conductor set to a couple with the JEO

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Speaker 1: political uncertainty. UM, so we'll likely see UM hyight ten

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Speaker 1: volatility in the Taiwan epithy market and mankly because of

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Speaker 1: the growth uncertainty, especially related to the semi khnum psycho slowdown. Alright, Checklin,

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Speaker 1: thank you so much for your time. Chekwan Fan is

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Speaker 1: h C i O at hs b C Global Private

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Speaker 1: Banking and Wealth, joining us in our Hong Kong studio