Speaker 1: Okay, let's get over to the next guest. It's where
Speaker 1: Chan chief China economist of Golden Secs, discussing the economic
Speaker 1: outlook for China itself. Well, thank you so much for
Speaker 1: joining us. I think you reported to report last week
Speaker 1: or published or at least for twenty three's outlook, and
Speaker 1: it was titled after winter comes Spring. Well, that's of
Speaker 1: course obvious, but the point is what will that spring
Speaker 1: look like? Uh, it's gonna look a bit messy because
Speaker 1: of getting our zero COVID after such a long time
Speaker 1: of UM. You know, keeping virus out of the country
Speaker 1: will mean a lot of people getting infections and getting sick,
Speaker 1: and uh, we don't know if the hospitals are going
Speaker 1: to be prepared for that wave of infections. So um,
Speaker 1: assuming that people will be apprehensive and there could be
Speaker 1: some hiccups, so it might be a bit of a
Speaker 1: massiw reopening process. When you look at the property market,
Speaker 1: which is obviously the other big story on the mainland,
Speaker 1: are you confident that we're going to see a recovery
Speaker 1: as we go into UM. I think the government hasn't
Speaker 1: made it pretty clear that they are doing everything possible
Speaker 1: to complete those press the properties the meaning they're cutting
Speaker 1: off the left tails. Um how whether they you know,
Speaker 1: we're going to see age as a stabilization or some
Speaker 1: notable recovery, that is still unclear. But I think the
Speaker 1: focus right here is that we don't want it to
Speaker 1: get any worse. So all the people pay their money
Speaker 1: to buy these properties to be delivered in three years,
Speaker 1: We're going to make sure the properties are being delivered. Therefore,
Speaker 1: people still have confidence in the system and still pay
Speaker 1: money up fronded to buy these pre sow the properties.
Speaker 1: But sure, but let's look further ahead. Shot we agree,
Speaker 1: I mean, you can. It's the property kind of model. Gun.
Speaker 1: Now we look at one of the fastest aging societies
Speaker 1: ever in history, and you're just gonna not need those
Speaker 1: number of properties that have been built. And so how
Speaker 1: does this all change the game? Yeah, that's the that's
Speaker 1: precisely point. That's the magnitude of a decline. Maybe too
Speaker 1: much for the government's liking, but the direction is by design.
Speaker 1: This is not a mistake or anything, and there's not
Speaker 1: They're not trying to engineer a you term, longer term.
Speaker 1: We simply do not need as many new apartments being
Speaker 1: built and being sold. Uh, do we need you know,
Speaker 1: thirty percent younger decline. That might be too much. We
Speaker 1: need a gradual adjustment. You still have organization ongoing. UM.
Speaker 1: But UM, you know, that's why we don't really expect
Speaker 1: the government to stimulate that the factor. The key is
Speaker 1: to stabilize it and to prevent any further U spiraling down. UM.
Speaker 1: So that's that's why they introduce all these measures to
Speaker 1: cut off the left tail. So in your work, boy,
Speaker 1: how do you understand the connection between what's going on
Speaker 1: in the property market and overall consumer sentiment in China? UM.
Speaker 1: The property factor, because it's the biggest asset on household balanche,
Speaker 1: is very important for UH sentiment and confidence among households.
Speaker 1: But I would say, right now is the COVID situation. Uh.
Speaker 1: You know, you can argue that even more important because
Speaker 1: if you don't have COVID situation resolved, UM, people have
Speaker 1: no confidence in their future income stream and their future
Speaker 1: job prospect. Even if you ease property factor, UH, you know,
Speaker 1: lending and down payment and mortgurate, it's unclear that can
Speaker 1: transmit into transactions. If I don't know if I have
Speaker 1: a job or not um now the next year, So
Speaker 1: I think Uh, for the property factor to have a
Speaker 1: proper recover recovery path, we need to get a COVID
Speaker 1: situation resolved. Well, this is it, isn't it? And there
Speaker 1: still living in China under COVID, whereas the rest of
Speaker 1: the world has largely come out of that whole terrible
Speaker 1: pandemic and what it did entail. Now, the thing is
Speaker 1: what could China learn from the other economies which bounce
Speaker 1: back after they reopened. Of course, this is a much
Speaker 1: I'm going to say, stag much more staggered reopening in China.
Speaker 1: So you could actually argue it to reopening with Chinese characteristics.
Speaker 1: And so how will the structure of the economy of altered?
Speaker 1: I think ideally, you know, given Chinese the government the
Speaker 1: conservative and doing everything gradual and running pilot of that
Speaker 1: kind of a style, that would be what they want
Speaker 1: to do. But I'm not sure on the crown, uh,
Speaker 1: you know, allows that to happen. I don't see how
Speaker 1: you can open one part of the country or open partially. Um,
Speaker 1: if the crown just so contagious that that's why come
Speaker 1: back to your initial question. Uh, it seems that this
Speaker 1: might be a messier process than the government would like
Speaker 1: to see because as soon as you UM left to
Speaker 1: the Zeo Covia policy is going to be massive spread
Speaker 1: of the virus. Let's talk briefly about US channel relations.
Speaker 1: We had President Spiden and GI meeting a little while
Speaker 1: back on the sidelines of the G twenty, but there
Speaker 1: remains a little bit of tension, particularly where high technology
Speaker 1: is concerned. I mean this relationship, are you expecting it
Speaker 1: to to improve over time in the new year or
Speaker 1: or is it going to be a case of stasis
Speaker 1: where we're pretty much each side watching the other very
Speaker 1: closely and unwilling to make significant movement. Yeah, UM, good question.
Speaker 1: I think there are different layers that to the U. S.
Speaker 1: China relationship. Is that improving from the very rock bottom?
Speaker 1: After UH Speaker Pelosi is a visit of Taiwan. UH,
Speaker 1: now at least we have a more talk to the
Speaker 1: I think the climate dialogue also restarted, UM, and Anthony B.
Speaker 1: Lincoln is coming to Beijing next year, So there are
Speaker 1: from that very bottom we are seeing some improvement, and
Speaker 1: hopefully after China reopens, will have more dialogue and visits
Speaker 1: and UH conversation that will be helpful. But the bigger
Speaker 1: picture there's a whole strategic competition the technology front. What
Speaker 1: we are seeing that big picture is unlikely to change.
Speaker 1: Uh and if anything, you know, this is going to
Speaker 1: be a very dynamic interplay that export controls being imposed
Speaker 1: and China will have to figure out how it will
Speaker 1: move forward. So we'll see how this plays out. Suite
Speaker 1: Sean from Goldman Sax, thanks so much for joining us
Speaker 1: here on Daybreakcasia