You know Goldman. No certainly not as golden as we
thought. I'm just wondering your take on them and
houses weigh on the outlook of China now.
Thanks for having me today. Have data on how many tourism alongside
services PMI we saw over the weekend are showing that China is still struggling
to see a sustained or strong recovery with the Covid policies in place.
In fact coldly pauses sideways property sector pressure agri to business risks.
China shock short term roles currently. So I mean are you seeing any signs of
improvement when you look at the data overall picture.
Well if you look at services and consumption sector recovery they are
really in sync with the Covid policies impulse throughout the year.
Whenever holding policy saw signs of easing these indicators would be coming
back stronger. Otherwise it's just going to still
struggle with a sustainable recovery. So that means as long as we could see
called the easing in coming quarters there is hope that the service sector
and consumption sector recovery will come back to that.
And we're still going to see them strengthening.
On the other hand on the export sector our manufacturing sector those sectors
are seeing a gradual slowdown from the peak of recovery in Q2.
I guess. Yeah.
You mentioned Covid 0 basically is what's dominating the narrative of the
consumption story. If that goes away does does everything
just turn a group will strew aggressively higher or do you think that
it's still going to be very slow and gradual.
So a recovery in consumption. Covid policy is the biggest wild card so
I think it's very possible to simply say if you're going to see a Southern
turnaround already you'll come back. It depends on how the Covid exit
strategy will play out. Our base case assumption is that we
probably aren't going to hear some communications over to call the exit
strategy after the patchy progress. But most likely the easing of closing
policy is going to be very gradual and it's going to happen throughout my Three
Mile Canyon. I appreciate it when you look at it.
The markets themselves right now and what they are actually telling us.
Are they really only baking in all the problems that we have right now.
What would it take now for that to be a move at a pivot if you will to the
upside and get the bulls out of their pens.
I think we need to see a few bottom lines being established on the slowing
down before we see more optimism in the markets.
First and foremost the property sector is too strong.
Because China is still pressing ahead with deleveraging policies through
relies on property sectors developers that not lifted and the controls and
many Su Keenan BOVESPA fires are also not lifted in some bigger cities.
So you are going to see any policy tensions establish a bottom line to
prevent any further attacks from bigness.
First you are going to see them struggling as well.
On the other hand we are still looking for a war.
Explanations from the party Congress the officials balances between the quantity
of growth as well as the world's rates to see where the balance was.
If there is a pivot towards the growth rates then we might see more policy
stimulus coming from the officials. Otherwise I think is still going to
press ahead with reforms. And that's going to be exchanged with
short term pain for long term gains. What else are we looking for in terms of
maybe just the political lineup. Right.
What does that tell us about policy moving forward.
Well I think for the coming party Congress President Xi is widely expected
to remain in power at least the next five years.
So the focus then will be on the lineup of the Politburo Standing Committee for
the dynamics of policy changes. And that goes hand-in-hand with a policy
priority for the next five years. They're also going to scrutinize the
funding for work report to see what the authorities are focused for the next
five five years. One that could.