WEBVTT - US Tariff Delay Boosts Global Market Sentiment 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, radio news. 0:00:10.760 --> 0:00:14.200 Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Chrisner. 0:00:14.440 --> 0:00:16.280 In a moment, we'll take a look at the story 0:00:16.320 --> 0:00:19.200 on tech stocks in China. David Chow will join us. 0:00:19.239 --> 0:00:22.840 He is global market strategist for the APAC at Invesco. 0:00:23.200 --> 0:00:25.480 But we begin in Hong Kong on a day when 0:00:25.520 --> 0:00:30.480 the Trump administration said it's considering reciprocal tariffs on numerous 0:00:30.520 --> 0:00:33.680 trading partners as soon as April. Joining us now is 0:00:33.720 --> 0:00:36.839 Helen Jew. She is managing partner also the CIO at 0:00:36.960 --> 0:00:41.400 NF Trinity. Helen joins from our radio studios in Hong Kong. Helen, 0:00:41.440 --> 0:00:43.560 thank you for making time to chat with us. I'd 0:00:43.600 --> 0:00:46.240 like to begin by getting your reaction when you hear 0:00:46.360 --> 0:00:50.320 that the Trump administration is saying, rather than a blanket tariff, 0:00:50.320 --> 0:00:53.720 we're going to create something with a bit of reciprocity, 0:00:53.920 --> 0:00:55.840 kind of tit for tat tariffs. How do you make 0:00:55.880 --> 0:00:56.400 sense of that? 0:00:57.360 --> 0:01:00.680 I think obviously the market is, you know, responding to 0:01:00.680 --> 0:01:04.400 this positively and seeing it as a better than feared 0:01:04.440 --> 0:01:07.240 type of potential resolution to the tariff threats that we 0:01:07.280 --> 0:01:07.720 have seen. 0:01:08.200 --> 0:01:10.000 So we all don't know. 0:01:09.959 --> 0:01:12.800 Too much about the reciprocal tariff regime, and obviously it's 0:01:12.840 --> 0:01:16.800 being cooked up at the moment. But if indeed it's 0:01:16.880 --> 0:01:21.440 going to be equaling out the tariff imbalance, then it 0:01:21.520 --> 0:01:24.800 actually means that we could have a scenario whereby everybody's 0:01:24.840 --> 0:01:28.600 cutting terriffs rather than just imposing more and more teriffs 0:01:28.720 --> 0:01:30.080 uniformly without. 0:01:30.280 --> 0:01:31.880 You know, rationale, et cetera. 0:01:32.000 --> 0:01:34.440 So that could actually be positive for global growth, and 0:01:34.480 --> 0:01:38.360 it could be positive for globalization and for countries like 0:01:38.440 --> 0:01:41.800 China that don't necessarily have huge tariff imbalances because China's 0:01:41.840 --> 0:01:44.880 not imposing a huge amount of tariffs on US imports, 0:01:46.080 --> 0:01:48.240 it could actually you know, be a relief. 0:01:48.560 --> 0:01:51.640 Speaking of relief, I'm seeing stocks in Hong Kong move 0:01:51.720 --> 0:01:53.800 higher at the moment, with the Hanks saying up about 0:01:53.800 --> 0:01:54.120 one per. 0:01:54.240 --> 0:01:54.920 That's the relief. 0:01:55.080 --> 0:01:56.280 Yeah, that is the relief. 0:01:56.400 --> 0:01:59.320 So is there an industry group that you think would 0:01:59.400 --> 0:02:02.280 benefit mostly from this type of policy. 0:02:03.320 --> 0:02:06.360 I think it really varies by country. So if I 0:02:06.400 --> 0:02:09.120 look at the US's exports, a lot of it is 0:02:09.160 --> 0:02:12.200 going to be like manufacturing in some materials and energy, 0:02:13.440 --> 0:02:17.280 you know, So I think it depends on what kind 0:02:17.320 --> 0:02:19.520 of deal can be worked out. But some of the 0:02:19.520 --> 0:02:24.679 country is most sensitive to the trade tariff imbalance with 0:02:24.720 --> 0:02:27.280 the US, include like for example, Indio, where he's uh, 0:02:27.560 --> 0:02:29.679 you know, obviously Trump has been talking to Moodi in 0:02:29.680 --> 0:02:32.800 the last couple of days. So I think the fact 0:02:32.840 --> 0:02:35.280 that you're going to settle this individually with different countries 0:02:35.320 --> 0:02:38.440 on a on a one by one basis is already 0:02:38.480 --> 0:02:41.720 a huge positive versus what the market was expecting. And 0:02:41.760 --> 0:02:45.680 for you know, very friendly allies that are nearby Mexico, Canada, 0:02:45.720 --> 0:02:51.040 et cetera, it's going to mean less onerous risk to 0:02:51.080 --> 0:02:53.959 them as well, right because they obviously export to the 0:02:54.040 --> 0:02:56.560 US a lot, but don't necessarily import a huge amount. 0:02:56.639 --> 0:03:01.000 And I'm guessing they probably don't have huge tariffs on 0:03:01.240 --> 0:03:04.720 US imports either, so that might actually give them a 0:03:04.760 --> 0:03:08.480 graceful way out and make them look less pressured. 0:03:08.680 --> 0:03:11.440 What is your sense of what is happening these days 0:03:11.440 --> 0:03:14.280 in China is so far as the economy is concerned 0:03:14.360 --> 0:03:17.760 right now, are we on a kind of an up 0:03:17.760 --> 0:03:20.200 trend at the moment? Have things turned a corner? And 0:03:20.440 --> 0:03:23.440 is there enough positivity to get you interested in putting 0:03:23.480 --> 0:03:24.760 money to work on the mainland? 0:03:25.360 --> 0:03:30.120 Well, I think the cyclical picture is basically stabilized, but 0:03:30.400 --> 0:03:33.080 hasn't really shown any meaningful signs of. 0:03:33.400 --> 0:03:34.480 V shape recovery. 0:03:34.880 --> 0:03:37.960 I think there's two main reasons why despite all the 0:03:38.040 --> 0:03:41.880 stimulus that's been put on over the last twelve months, 0:03:42.160 --> 0:03:44.840 there hasn't been too much reaction. One is because of 0:03:45.000 --> 0:03:48.400 the overhang of the uncertainty about the tariffs and the 0:03:48.440 --> 0:03:48.960 trade war. 0:03:49.680 --> 0:03:50.720 And the second one is. 0:03:50.680 --> 0:03:55.280 Actually because of the lagging and still suffering property market, 0:03:55.520 --> 0:03:59.360 as prices have come down and price expectation is still negative, 0:03:59.600 --> 0:04:02.680 which is actually a big burden on people's you know, 0:04:02.920 --> 0:04:07.880 wealth effect and expectation. So I think the former could 0:04:07.920 --> 0:04:10.600 have some short term relief if things had in the 0:04:10.600 --> 0:04:13.120 direction that we're talking about, which is obviously still some 0:04:13.200 --> 0:04:15.360 tariffs but maybe not as bad as what we had 0:04:15.360 --> 0:04:19.440 been anticipating. But the latter one, which is the property 0:04:19.480 --> 0:04:22.719 market and the price expectation, I think that still takes 0:04:22.720 --> 0:04:25.640 some time to fix and is probably not going to 0:04:25.680 --> 0:04:28.680 be an instantaneous recovery. But that said, I think the 0:04:28.720 --> 0:04:31.960 second derivative is improving, i e. Things are still declining, 0:04:32.040 --> 0:04:35.400 but declining at a lower pace versus before, so on 0:04:35.440 --> 0:04:38.320 the margin, I think that's actually a positive to some extent. 0:04:38.440 --> 0:04:41.239 So just on the basis of valuation alone, isn't China 0:04:41.279 --> 0:04:43.640 compelling from a valuation perspective. 0:04:43.680 --> 0:04:45.799 Certainly it has been compelling for quite some time. 0:04:45.880 --> 0:04:48.440 It's just that people have been worried about the grave 0:04:48.520 --> 0:04:51.320 uncertainties facing the economy for the reasons that I had mentioned. 0:04:52.080 --> 0:04:53.000 I think it has to. 0:04:52.920 --> 0:04:57.200 Come from, you know, whatever happens with the tariffs with China. 0:04:57.279 --> 0:04:59.960 The sooner that you have clarity and it gets sorted out, 0:05:00.160 --> 0:05:03.480 the better. If everything gets dragged out until end of 0:05:03.520 --> 0:05:05.520 this year or even into next year, even if the 0:05:05.640 --> 0:05:08.400 end result ends up being not too bad, just that 0:05:08.640 --> 0:05:10.960 you know, never ending uncertainty I think is going to 0:05:10.960 --> 0:05:15.040 be you know, pretty negative for the broader economy because 0:05:15.080 --> 0:05:17.760 people won't really know whether they should place orders, whether 0:05:17.760 --> 0:05:20.920 they should hire people. All of those decisions are going 0:05:20.960 --> 0:05:22.880 to be you know, in. 0:05:22.760 --> 0:05:26.000 Doubt, we had some dollar weakness during New York trading today, 0:05:26.080 --> 0:05:30.360 the combination of lower treasure yields also the delay of 0:05:30.480 --> 0:05:34.640 those reciprocal tariffs. To what extent has a strong dollar 0:05:34.720 --> 0:05:38.080 been problematic for putting money to work in Asia? 0:05:38.600 --> 0:05:41.039 Oh, it's been a huge problem. I mean, that's been 0:05:41.200 --> 0:05:45.400 the key factor to weigh on asset prices in Asia, 0:05:45.880 --> 0:05:49.320 in China, and particularly in the rest of emerging markets. Actually, 0:05:49.360 --> 0:05:51.760 in this regard, the R and B has been much 0:05:51.800 --> 0:05:56.120 more resilient and much less volatile versus most other Asian 0:05:56.440 --> 0:05:59.960 currencies and emerging market currencies, mostly because of the PBOC 0:06:00.200 --> 0:06:03.320 intervention and defense of the currency. But if the dollar 0:06:03.400 --> 0:06:06.640 can you know, start to weaken to some extent or 0:06:06.640 --> 0:06:11.000 at least not strengthen even further, I think that would 0:06:11.000 --> 0:06:13.279 be a massive positive for the rest of the world 0:06:13.520 --> 0:06:16.040 in terms of asset prices. And we're actually much more 0:06:16.080 --> 0:06:18.680 positive on the rest of the world versus on US. 0:06:19.320 --> 0:06:22.600 Obviously last year was all about US exceptionalism, especially after 0:06:22.640 --> 0:06:24.280 the election heading into the year end. 0:06:24.680 --> 0:06:26.120 But you know, a few factors. 0:06:26.680 --> 0:06:29.880 One is that the US economy, despite being strong, you know, 0:06:29.920 --> 0:06:33.280 the long end, may not necessarily keep going up, especially 0:06:33.360 --> 0:06:35.880 you know, Scott Besson talked about bringing down the long 0:06:36.000 --> 0:06:40.120 end if at all possible, through less supply of treasuries 0:06:40.160 --> 0:06:42.240 and so on and so forth. And then I think 0:06:42.360 --> 0:06:47.320 on the margin, the less than worst case Tariff's scenario 0:06:47.400 --> 0:06:50.400 is positive for the rest of the world, and on 0:06:50.440 --> 0:06:53.640 the margin, any kind of progress towards resolution of the 0:06:53.640 --> 0:06:56.880 wars in the Middle East and Ukraine are going to 0:06:56.920 --> 0:06:59.479 be more positive for the rest of the world, Europe, etc. 0:07:00.320 --> 0:07:03.280 For the US. So some of these factors are shifting 0:07:03.360 --> 0:07:04.800 away from. 0:07:04.640 --> 0:07:07.680 The US exceptionalism thesis that had been in place for 0:07:07.720 --> 0:07:08.240 a long time. 0:07:08.360 --> 0:07:10.520 When we look at the inflation story in China, the 0:07:10.560 --> 0:07:14.640 latest CPI data showed a slight improvement, a little bit 0:07:14.640 --> 0:07:17.920 of positivity, but certainly when you look at factory gate data, 0:07:17.920 --> 0:07:21.480 I think we are negative for a twenty eighth consecutive month, 0:07:21.560 --> 0:07:26.280 so clearly at the wholesale level mired in deflation. Still, 0:07:27.000 --> 0:07:29.800 how is Beijing going to deal with this? And if 0:07:29.880 --> 0:07:33.040 it is not dealt with to what degree? Is this 0:07:33.080 --> 0:07:34.120 a major problem? 0:07:34.560 --> 0:07:36.480 Oh, it has been a major problem for a couple 0:07:36.520 --> 0:07:36.840 of years. 0:07:36.840 --> 0:07:37.920 Are one of eight months. 0:07:39.000 --> 0:07:42.960 One of the key issues though, is is that, well, 0:07:43.040 --> 0:07:47.280 the consumer confidence and you know, the lackluster you know, 0:07:47.640 --> 0:07:50.160 overall activity level. I think that's definitely been a factor. 0:07:50.200 --> 0:07:53.440 But the other factor, which might actually reverse on its own, 0:07:53.680 --> 0:07:57.440 is just that food prices, you know, the hog cycle 0:07:57.600 --> 0:07:59.840 and so on and so forth, were really dire and 0:08:00.040 --> 0:08:00.760 dragging down. 0:08:00.640 --> 0:08:01.600 The CPI as well. 0:08:01.640 --> 0:08:04.360 But that has started to improve as the supply has 0:08:04.440 --> 0:08:08.520 exited and as the base effect gets easier, so I 0:08:08.520 --> 0:08:10.520 think the food would be less of a drag. As 0:08:10.520 --> 0:08:15.920 for the core, it's been positive overall throughout this period, 0:08:15.960 --> 0:08:19.000 somewhere between zero and one percent positive, so definitely not 0:08:19.360 --> 0:08:22.560 a huge boost, but certainly I think if there is 0:08:22.600 --> 0:08:24.640 any kind of improvement in the confidence because of the 0:08:24.720 --> 0:08:28.360 teriff situation, because of the simulative policies that the government 0:08:28.360 --> 0:08:31.080 has put on, I think that will eventually start to 0:08:31.120 --> 0:08:35.560 show through. The major risk to a reflation story in 0:08:35.679 --> 0:08:39.920 China would be if energy price is crashed globally because 0:08:39.960 --> 0:08:41.480 of what's happening outside of China. 0:08:41.559 --> 0:08:43.679 Let's say, for example, if. 0:08:43.520 --> 0:08:46.839 The wars end and oil price moves down by ten 0:08:46.880 --> 0:08:50.360 bucks or something like that, then you know, associated with that, 0:08:50.480 --> 0:08:53.959 metals prices and everything else would react accordingly, which might 0:08:54.040 --> 0:08:57.440 create an error pocket of de stocking for various companies 0:08:57.480 --> 0:08:59.760 as they wait to buy things cheaper, you know, three 0:08:59.760 --> 0:09:03.000 to six months later. But overall, speaking for a country 0:09:03.040 --> 0:09:07.280 like China that's very reliant on import of energy and materials, 0:09:07.840 --> 0:09:11.240 it's still net positive versus the deflationary forces on the 0:09:11.280 --> 0:09:13.480 rest of the world might be less positive. 0:09:13.880 --> 0:09:16.480 We're going to talk about the high tech story in 0:09:16.559 --> 0:09:18.920 China with our next guest in a moment or two. 0:09:18.960 --> 0:09:20.960 But I want to get your take on what we've 0:09:21.000 --> 0:09:26.160 seen recently with the development on deep seek artificial intelligence 0:09:26.200 --> 0:09:28.800 in China. What do you think is important to tease 0:09:28.800 --> 0:09:29.200 out here? 0:09:29.840 --> 0:09:33.320 Well, I think, you know, it's quite clear that the 0:09:33.360 --> 0:09:38.439 world has just recognized that there are very rapid technological 0:09:38.480 --> 0:09:41.880 developments in China as well as in the US. And 0:09:42.000 --> 0:09:45.840 this is actually quite surprisingly impactful outside of China as well, 0:09:45.880 --> 0:09:49.280 because you know, apparently the American consumer cares more about 0:09:49.640 --> 0:09:51.800 being able to use an LM for free and saving 0:09:51.840 --> 0:09:54.720 the twenty bucks off TRAGBT and less concerned about whether 0:09:54.800 --> 0:09:58.600 this is a you know, invasion of Chinese technology into 0:09:58.640 --> 0:10:02.240 the US society and whether you know, the Chinese are 0:10:02.280 --> 0:10:05.440 going to run off with any of their personal queries information. So, 0:10:06.720 --> 0:10:10.760 you know, if there can be any global potential for 0:10:10.920 --> 0:10:14.440 China AI, that would be the you know, kind of 0:10:14.679 --> 0:10:19.160 really upside case scenario. I'm a little bit concerned and 0:10:19.200 --> 0:10:23.080 skeptical because I think the geopolitical situation is not going 0:10:23.120 --> 0:10:24.959 to improve so much in the short term that. 0:10:26.440 --> 0:10:28.600 Many other countries are going to trust China AI. 0:10:28.760 --> 0:10:32.760 There's probably still a more permanent decoupling from a strategic 0:10:32.800 --> 0:10:36.120 technologies perspective that will last even if the near term 0:10:36.160 --> 0:10:39.520 cyclical trade situation sees a better than expected outcome. 0:10:39.679 --> 0:10:42.200 And we didn't even discuss TikTok. We'll save that for 0:10:42.280 --> 0:10:44.920 next time. Helen, Thank you so much. Helen's you there, 0:10:45.040 --> 0:10:49.080 Managing partner and CIO at NF Trinity from our studios 0:10:49.080 --> 0:10:51.360 in Hong Kong, joining us here on the Daybreak Asia 0:10:51.440 --> 0:11:03.080 Podcastcome back to the Daybreak Asia Podcast. I'm Doug Chrisner. 0:11:03.280 --> 0:11:06.160 We go next to Singapore and we find David Choo. 0:11:06.240 --> 0:11:10.680 He is the global market strategist for the apec at Invesco. David, 0:11:10.679 --> 0:11:12.480 thanks for being with us. It's always a pleasure to 0:11:12.559 --> 0:11:15.000 chat with you. Earlier today in the US, there was 0:11:15.040 --> 0:11:18.720 a fair amount of positivity as it related to President 0:11:18.760 --> 0:11:23.040 Trump essentially delaying some of the reciprocal tariffs that the 0:11:23.160 --> 0:11:26.160 new administration is considering. We understand they're not going to 0:11:26.200 --> 0:11:28.840 take place right away. Maybe the market's hoping for some 0:11:29.000 --> 0:11:32.960 type of negotiation. So when you assess risk of these 0:11:33.000 --> 0:11:36.920 tariffs as it relates to US trading partners like China, Japan, 0:11:37.080 --> 0:11:39.720 South Korea, does that cause you a bit of unease 0:11:39.880 --> 0:11:42.160 in terms of putting new money to work in the 0:11:42.160 --> 0:11:42.920 Asia Pacific. 0:11:43.400 --> 0:11:47.080 Well. To be frank, the teriffs that that am In 0:11:47.480 --> 0:11:50.920 levied against China, I'm not ten percent was much better 0:11:50.960 --> 0:11:55.480 than the sixty percent that we feared that President Trump 0:11:55.520 --> 0:11:57.080 previously hadn't mentioned before. 0:11:57.360 --> 0:11:58.560 And I think that. 0:12:00.800 --> 0:12:05.760 Taking a much more conciliatory gesture and attitude towards China, 0:12:05.800 --> 0:12:09.040 which I think is a positive development, and it is 0:12:09.080 --> 0:12:10.839 also one of the reasons why I think Chinese stocks 0:12:10.840 --> 0:12:16.000 have also done well. This reciprocal tariff that has just 0:12:16.160 --> 0:12:19.840 been announced, I think it's a much bigger deal than 0:12:20.000 --> 0:12:24.320 the universal measures so previously Trump you know, you know, 0:12:24.840 --> 0:12:28.760 was interested in imposing a flat universal tariff of ten 0:12:28.800 --> 0:12:31.679 to twenty percent on imports from all countries, but now 0:12:31.760 --> 0:12:35.600 it seems like he's moving towards the reciprocal tariffs to 0:12:35.640 --> 0:12:38.280 be imposed on a country by country basis. Now, if 0:12:38.320 --> 0:12:41.120 we look at which countries are the big losers and 0:12:41.160 --> 0:12:45.240 the big winners on that, you know, the big losers 0:12:45.280 --> 0:12:48.400 would be like India and Brazil. I think they would 0:12:48.400 --> 0:12:51.040 be hit the hardest, followed by the EU and the UK, 0:12:52.200 --> 0:12:54.760 you know, Mexico and Canada and the winners would actually 0:12:54.760 --> 0:12:58.160 be places like Singapore, Taiwan, and Korea. 0:12:58.880 --> 0:13:02.040 But companies in China haven't they already repositioned some of 0:13:02.080 --> 0:13:05.880 their supply chains to try to get around these tariffs. 0:13:06.000 --> 0:13:06.600 That's right. 0:13:06.800 --> 0:13:09.720 I mean they've had what like around eight years to 0:13:09.800 --> 0:13:15.840 be able to prepare, and we've seen significant supply chain diversification. 0:13:15.920 --> 0:13:19.880 So if you look at the trade between the US 0:13:19.920 --> 0:13:24.400 and China, it's it's downced pretty meaningfully over the past 0:13:24.440 --> 0:13:28.319 eight years. Although the China still enjoys a trade surplus, 0:13:28.360 --> 0:13:31.360 it's it's much less than what it was before. Now 0:13:31.440 --> 0:13:35.640 China does more trade between you know, China and Southeast 0:13:35.679 --> 0:13:40.000 Asia than and than China and US. But to be frank, 0:13:40.880 --> 0:13:42.920 you know, maybe some of these Chinese companies are using 0:13:42.920 --> 0:13:45.880 places like Mexico to rewraup some of this trade and 0:13:45.880 --> 0:13:49.520 get around some of these tariff barriers into the US. 0:13:50.000 --> 0:13:53.120 And so we've seen that the trade deficit between Mexico 0:13:53.679 --> 0:13:56.400 and the US has grown around you know, the same 0:13:56.440 --> 0:14:00.600 amount as the trade deficit between China and Mexico. 0:14:01.040 --> 0:14:04.120 There is no mistaking the exuberance that we have seen 0:14:04.160 --> 0:14:09.840 in China regarding artificial intelligence recently, especially since the unveiling 0:14:09.840 --> 0:14:12.920 of that chatbot from deep Seek. Is this a trade 0:14:12.920 --> 0:14:15.200 that you must be participating in right now? 0:14:15.840 --> 0:14:20.640 Well, we have become more constructive on Chinese equities starting 0:14:20.640 --> 0:14:24.920 around them the summer of last year. Given where valuations were, 0:14:24.920 --> 0:14:27.840 we thought that they really reached kind of the bottom, 0:14:28.600 --> 0:14:32.600 and then we saw significant fiscal and monetary stimulus measures 0:14:32.640 --> 0:14:33.240 that were announced. 0:14:33.240 --> 0:14:35.520 It seems like the government has really pivoted. 0:14:35.560 --> 0:14:40.640 Towards ensuring that both the market and the economy starts 0:14:40.640 --> 0:14:41.400 to turn around. 0:14:41.680 --> 0:14:41.960 Now. 0:14:42.960 --> 0:14:46.359 Now, this Deep Seek development, I think is a gift 0:14:46.760 --> 0:14:51.160 in terms of a catalyst that investors can use. 0:14:51.000 --> 0:14:52.640 To look at Chinese equities again. 0:14:53.080 --> 0:14:57.200 And when foreign investors pivot back to China, we know 0:14:57.240 --> 0:15:01.840 that Chinese equities have been unloved so long that the 0:15:01.880 --> 0:15:05.520 first stocks that they buy are the big cap tech 0:15:05.560 --> 0:15:09.160 stocks you know, trading on on Hong Kong. And we've 0:15:09.160 --> 0:15:12.680 seen you know, the Hangsang Tech type index you know, 0:15:12.760 --> 0:15:16.080 up double digits so far these days. So I think 0:15:16.080 --> 0:15:19.960 that if investors wanted to dip their toes back into 0:15:20.040 --> 0:15:23.720 China bond, Chinese tech would be the place to look at. 0:15:24.000 --> 0:15:26.040 I'd like to get your perspective on where we are 0:15:26.080 --> 0:15:29.280 in the recovery of the mainland economy, especially as it 0:15:29.320 --> 0:15:32.440 relates to the property market. Are things is a bottom? 0:15:32.520 --> 0:15:34.400 Let me put it that way, is a bottom firmly 0:15:34.440 --> 0:15:34.880 in place. 0:15:35.520 --> 0:15:37.840 I'm not I'm not going to be the one that called, 0:15:38.800 --> 0:15:42.800 you know, the property in China, you know, has bottom. 0:15:42.880 --> 0:15:45.800 What I will say, things are getting less bad, and 0:15:46.120 --> 0:15:48.600 I think that's already a pretty positive development. 0:15:48.840 --> 0:15:51.400 So what we have to. 0:15:51.400 --> 0:15:56.680 See, you know, is at bottoming would be when across 0:15:56.680 --> 0:16:00.400 the board the property data starts to stabilize or improve. 0:16:01.320 --> 0:16:04.440 We're starting to see prices in first year cities like 0:16:04.520 --> 0:16:08.880 Shanghai and Beijing both you know, primary and secondary home 0:16:08.920 --> 0:16:13.120 prices start to improve, but not so much in Tier 0:16:13.160 --> 0:16:16.080 three in tier four cities, but it seems like the 0:16:16.080 --> 0:16:19.280 government is taking a much more muscled approach, you know, 0:16:19.360 --> 0:16:26.520 bailing out developers, really loosening restrictions on property purchases. 0:16:26.720 --> 0:16:30.320 So what I would say is that I expect more 0:16:30.360 --> 0:16:35.800 of a stability of housing prices, new home starts floor 0:16:35.840 --> 0:16:38.800 area sold by the middle of this year, and if 0:16:38.880 --> 0:16:41.640 the property market can just stabilize and you know from 0:16:41.640 --> 0:16:43.720 the second half of this year, now that really add 0:16:43.760 --> 0:16:46.120 a tail into economic growth in China for the year. 0:16:46.240 --> 0:16:51.160 So stability, does that necessarily translate into improved consumer sentiment? 0:16:51.240 --> 0:16:54.400 And maybe while we're talking about the Chinese consumer, you 0:16:54.400 --> 0:16:57.720 can give me your perspective on what you observed over 0:16:57.760 --> 0:16:59.600 the recent Lunar New Year holiday. 0:17:00.280 --> 0:17:05.640 Sure, I'd say that there are green shoots in consumer spending, 0:17:05.800 --> 0:17:11.800 household spending in China, and. 0:17:11.160 --> 0:17:13.600 The initial data out of China during the Lunar Nei 0:17:13.680 --> 0:17:16.400 year last week pointed to pretty strong activity. 0:17:16.640 --> 0:17:18.920 So domestic trips were. 0:17:18.800 --> 0:17:22.399 Up five point nine percent compared to last year, and 0:17:22.440 --> 0:17:26.080 spending on these trips rose seven percent according to the 0:17:26.119 --> 0:17:26.800 Chinese data. 0:17:26.880 --> 0:17:29.000 And Chinese thoughts reacted. 0:17:28.560 --> 0:17:32.600 Pretty strongly, you know, when they reopened following the holiday. 0:17:33.240 --> 0:17:37.639 So as you know, domestic spending is the key. It's 0:17:37.680 --> 0:17:42.600 the crux I think for more investors this year, whether 0:17:42.720 --> 0:17:45.199 it picks up or not. And I think that it 0:17:45.280 --> 0:17:47.840 is directly linked to the property market, so you can 0:17:47.840 --> 0:17:50.960 see more stable signs coming out of the property market. 0:17:51.000 --> 0:17:52.960 I think that investors feel a lot more confident to 0:17:53.000 --> 0:17:54.520 go out and consume. 0:17:54.720 --> 0:17:57.840 So away from China, you mentioned the positivity that you're 0:17:57.840 --> 0:18:01.119 seeing in Singapore. I'm wondering if they're other markets or 0:18:01.240 --> 0:18:05.560 jurisdictions in the APEC region where maybe foreign investors would 0:18:05.560 --> 0:18:06.480 find value. 0:18:06.640 --> 0:18:09.800 Well, I think what's interesting is going on in India 0:18:09.920 --> 0:18:13.280 Indian stock. Indian stocks are down around you know, eleven 0:18:13.400 --> 0:18:17.720 twelve percent from their highs in September. But this is 0:18:17.720 --> 0:18:20.639 after you know, they've had you know, a huge bowl run. Right, 0:18:20.680 --> 0:18:22.600 Indian stocks are the only stock that have outperformed the 0:18:22.720 --> 0:18:24.159 S and P over the past twenty years. 0:18:24.840 --> 0:18:29.080 So the economy experiencing a bit of a cyclical slowdown. 0:18:29.560 --> 0:18:32.080 The previous quarter growth was something like, you know, five 0:18:32.119 --> 0:18:35.560 and a half five point seven percent, you know, you know, 0:18:35.640 --> 0:18:38.800 which missed expectations, you know, which were around six and 0:18:38.800 --> 0:18:42.680 a half percent, and that was because you know, consumer 0:18:42.800 --> 0:18:45.000 spending is also taking a bit of a back seat. 0:18:45.480 --> 0:18:48.560 Government spending, uh, you know, was on a pause, you know, 0:18:48.600 --> 0:18:52.520 after the elections last year as the government formed a cabinet. 0:18:52.800 --> 0:18:55.639 But things I think are starting to turn up for 0:18:55.640 --> 0:18:58.880 for the cyclical growth part in India. And so despite 0:18:58.920 --> 0:19:02.600 Indian stocks being expensive, you know, investors have traditionally paid 0:19:02.680 --> 0:19:06.320 up for growth, and IDIA is the only major economy 0:19:06.480 --> 0:19:09.040 where growth is going to accelerate, you know, from five 0:19:09.040 --> 0:19:10.760 point seven to six and a half percent in the 0:19:10.800 --> 0:19:13.040 coming year. Maybe seven and a half percent in the 0:19:13.080 --> 0:19:16.640 next year. So I'm bullish on Indian stocks. I think 0:19:16.680 --> 0:19:19.040 that for investors that had been waiting, you know, for 0:19:19.119 --> 0:19:20.679 Indian socks that come down, I think this could be 0:19:20.720 --> 0:19:21.840 an interesting opportunity. 0:19:22.119 --> 0:19:24.359 David, thank you so much for taking the time to 0:19:24.400 --> 0:19:27.119 chat with us. David Chow there, global market strategist for 0:19:27.160 --> 0:19:30.359 the APEC at Invesco, joining from Singapore here on the 0:19:30.440 --> 0:19:36.520 Daybreak Asia podcast. Thanks for listening to today's episode of 0:19:36.560 --> 0:19:40.680 the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look 0:19:40.680 --> 0:19:44.480 at the story shaping markets, finance, and geopolitics in the 0:19:44.520 --> 0:19:47.760 Asia Pacific. You can find us on Apple, Spotify, the 0:19:47.800 --> 0:19:51.840 Bloomberg Podcast YouTube channel, or anywhere else you listen. Join 0:19:51.920 --> 0:19:54.919 us again tomorrow for insight on the market moves from 0:19:54.960 --> 0:19:59.399 Hong Kong to Singapore and Australia. I'm Doug Risner and 0:19:59.520 --> 0:20:00.680 this is Bloomberg. 0:20:08.040 --> 0:20:08.240 Hmm.