WEBVTT - Hui Shan on China's Eco Outlook

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<v Speaker 1>Okay, let's get over to the next guest. It's where

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<v Speaker 1>Chan chief China economist of Golden Secs, discussing the economic

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<v Speaker 1>outlook for China itself. Well, thank you so much for

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<v Speaker 1>joining us. I think you reported to report last week

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<v Speaker 1>or published or at least for twenty three's outlook, and

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<v Speaker 1>it was titled after winter comes Spring. Well, that's of

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<v Speaker 1>course obvious, but the point is what will that spring

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<v Speaker 1>look like? Uh, it's gonna look a bit messy because

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<v Speaker 1>of getting our zero COVID after such a long time

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<v Speaker 1>of UM. You know, keeping virus out of the country

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<v Speaker 1>will mean a lot of people getting infections and getting sick,

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<v Speaker 1>and uh, we don't know if the hospitals are going

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<v Speaker 1>to be prepared for that wave of infections. So um,

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<v Speaker 1>assuming that people will be apprehensive and there could be

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<v Speaker 1>some hiccups, so it might be a bit of a

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<v Speaker 1>massiw reopening process. When you look at the property market,

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<v Speaker 1>which is obviously the other big story on the mainland,

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<v Speaker 1>are you confident that we're going to see a recovery

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<v Speaker 1>as we go into UM. I think the government hasn't

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<v Speaker 1>made it pretty clear that they are doing everything possible

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<v Speaker 1>to complete those press the properties the meaning they're cutting

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<v Speaker 1>off the left tails. Um how whether they you know,

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<v Speaker 1>we're going to see age as a stabilization or some

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<v Speaker 1>notable recovery, that is still unclear. But I think the

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<v Speaker 1>focus right here is that we don't want it to

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<v Speaker 1>get any worse. So all the people pay their money

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<v Speaker 1>to buy these properties to be delivered in three years,

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<v Speaker 1>We're going to make sure the properties are being delivered. Therefore,

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<v Speaker 1>people still have confidence in the system and still pay

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<v Speaker 1>money up fronded to buy these pre sow the properties.

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<v Speaker 1>But sure, but let's look further ahead. Shot we agree,

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<v Speaker 1>I mean, you can. It's the property kind of model. Gun.

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<v Speaker 1>Now we look at one of the fastest aging societies

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<v Speaker 1>ever in history, and you're just gonna not need those

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<v Speaker 1>number of properties that have been built. And so how

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<v Speaker 1>does this all change the game? Yeah, that's the that's

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<v Speaker 1>precisely point. That's the magnitude of a decline. Maybe too

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<v Speaker 1>much for the government's liking, but the direction is by design.

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<v Speaker 1>This is not a mistake or anything, and there's not

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<v Speaker 1>They're not trying to engineer a you term, longer term.

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<v Speaker 1>We simply do not need as many new apartments being

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<v Speaker 1>built and being sold. Uh, do we need you know,

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<v Speaker 1>thirty percent younger decline. That might be too much. We

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<v Speaker 1>need a gradual adjustment. You still have organization ongoing. UM.

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<v Speaker 1>But UM, you know, that's why we don't really expect

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<v Speaker 1>the government to stimulate that the factor. The key is

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<v Speaker 1>to stabilize it and to prevent any further U spiraling down. UM.

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<v Speaker 1>So that's that's why they introduce all these measures to

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<v Speaker 1>cut off the left tail. So in your work, boy,

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<v Speaker 1>how do you understand the connection between what's going on

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<v Speaker 1>in the property market and overall consumer sentiment in China? UM.

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<v Speaker 1>The property factor, because it's the biggest asset on household balanche,

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<v Speaker 1>is very important for UH sentiment and confidence among households.

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<v Speaker 1>But I would say, right now is the COVID situation. Uh.

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<v Speaker 1>You know, you can argue that even more important because

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<v Speaker 1>if you don't have COVID situation resolved, UM, people have

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<v Speaker 1>no confidence in their future income stream and their future

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<v Speaker 1>job prospect. Even if you ease property factor, UH, you know,

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<v Speaker 1>lending and down payment and mortgurate, it's unclear that can

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<v Speaker 1>transmit into transactions. If I don't know if I have

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<v Speaker 1>a job or not um now the next year, So

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<v Speaker 1>I think Uh, for the property factor to have a

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<v Speaker 1>proper recover recovery path, we need to get a COVID

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<v Speaker 1>situation resolved. Well, this is it, isn't it? And there

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<v Speaker 1>still living in China under COVID, whereas the rest of

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<v Speaker 1>the world has largely come out of that whole terrible

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<v Speaker 1>pandemic and what it did entail. Now, the thing is

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<v Speaker 1>what could China learn from the other economies which bounce

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<v Speaker 1>back after they reopened. Of course, this is a much

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<v Speaker 1>I'm going to say, stag much more staggered reopening in China.

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<v Speaker 1>So you could actually argue it to reopening with Chinese characteristics.

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<v Speaker 1>And so how will the structure of the economy of altered?

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<v Speaker 1>I think ideally, you know, given Chinese the government the

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<v Speaker 1>conservative and doing everything gradual and running pilot of that

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<v Speaker 1>kind of a style, that would be what they want

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<v Speaker 1>to do. But I'm not sure on the crown, uh,

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<v Speaker 1>you know, allows that to happen. I don't see how

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<v Speaker 1>you can open one part of the country or open partially. Um,

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<v Speaker 1>if the crown just so contagious that that's why come

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<v Speaker 1>back to your initial question. Uh, it seems that this

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<v Speaker 1>might be a messier process than the government would like

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<v Speaker 1>to see because as soon as you UM left to

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<v Speaker 1>the Zeo Covia policy is going to be massive spread

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<v Speaker 1>of the virus. Let's talk briefly about US channel relations.

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<v Speaker 1>We had President Spiden and GI meeting a little while

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<v Speaker 1>back on the sidelines of the G twenty, but there

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<v Speaker 1>remains a little bit of tension, particularly where high technology

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<v Speaker 1>is concerned. I mean this relationship, are you expecting it

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<v Speaker 1>to to improve over time in the new year or

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<v Speaker 1>or is it going to be a case of stasis

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<v Speaker 1>where we're pretty much each side watching the other very

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<v Speaker 1>closely and unwilling to make significant movement. Yeah, UM, good question.

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<v Speaker 1>I think there are different layers that to the U. S.

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<v Speaker 1>China relationship. Is that improving from the very rock bottom?

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<v Speaker 1>After UH Speaker Pelosi is a visit of Taiwan. UH,

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<v Speaker 1>now at least we have a more talk to the

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<v Speaker 1>I think the climate dialogue also restarted, UM, and Anthony B.

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<v Speaker 1>Lincoln is coming to Beijing next year, So there are

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<v Speaker 1>from that very bottom we are seeing some improvement, and

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<v Speaker 1>hopefully after China reopens, will have more dialogue and visits

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<v Speaker 1>and UH conversation that will be helpful. But the bigger

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<v Speaker 1>picture there's a whole strategic competition the technology front. What

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<v Speaker 1>we are seeing that big picture is unlikely to change.

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<v Speaker 1>Uh and if anything, you know, this is going to

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<v Speaker 1>be a very dynamic interplay that export controls being imposed

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<v Speaker 1>and China will have to figure out how it will

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<v Speaker 1>move forward. So we'll see how this plays out. Suite

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<v Speaker 1>Sean from Goldman Sax, thanks so much for joining us

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<v Speaker 1>here on Daybreakcasia