So we know this reading is going to be pretty poor. The question is how sustained is this. Is this downturn. And if we do see
that lifting of restrictions over the next few weeks and months how well positioned is the economy for a sharp rebound.
Thank you for your question. I think that's a very fair and probably the million word zillion dollar question now. People
are all wondering what exactly is it going to take for policymakers to pull out of bigger policy easing measures to try
to help. I think over the weekend we're seeing the start of it. This is top down. So the previous year and CBI are seeing
announcing together this collective policy measures to cut the mortgage interest rates. We think this is quite encouraging.
However you know the magnitude of the change is pretty limited. And therefore I'm not necessarily too positive that this will
immediately boost overall growth especially the year the demand from the property market. I think what it takes however is for
credit expansion to accelerate change takes some one and just 20 basis points. Even in mortgage area. We need to see much more
than that. And in fact in our view there are three things that are currently we see as a possible trinity which is 5.5 percent
growth target and also the zero coalmine policy. And last is the you so the deleveraging. So out of the three only tool got to
exist. Something is going to get. Right. So we think that the most likely outcome is that we stick to zero cold policy and we
see policymakers also sticking to that 5.5 percent growth target. But at the end of the day they will have to start re
leveraging if there is always stabilization. Yeah. There is always some sort of impossible trinity when it
comes to those economic instability priorities for China. So the deleveraging has been on the back foot for quite some time. So
DC just the appalling off of systemic risk then. Absolutely. Heidi I think the biggest problem is that we
currently see is the continued pressure on credit and to the extent that you know the business
confidence is being shaken and therefore the credit demand is now fundamentally being damaged. And therefore it takes more
than just a simple interest rate cuts to a boosted the credit demand. We are hoping to see maybe some combination measures. So
for example infrastructure investment slash social housing projects you know basically offering semi sovereign type of
credit worthiness combined with low cost credit. And when we see this type of measure coming out I think we could for much more
bullish. How are you feeling about the. You won at this point given the
weakness that we've seen recently and its tolerance level by policy makers.
Well I think that the the one weakness is probably the near-term unavoidable given that we see the divergence between video see
it and the side of monetary policy relative tiredness. But keep in mind that we think you know a change rate depreciation could
potentially also help in the extent that to the extent that it will help them do some financial conditions. So if you couldn't
boost credit conditions fast it was a credit expansion fast enough. The alternative is to actually get a little bit of
currency help from depreciation. So if we can have both. I think that will be quite helpful. Also rose to stabilize.
Can growth stabilize without really lifting completely of the Covid zero policy. And what does that mean for the very
ambitious five and a half percent growth target by policymakers. Sheriff Shery Ahn said such a question but I think many people
are saying this is a dilemma. You have either or either you have the you know the zero Covid policy or you have growth. But I
don't necessarily think that these are necessarily directly out of conflict. In fact we think that if they can start with
stabilization in infrastructure investment and and managed to on to to bolster the property market we think there is a fairly
good chance that we could see a little bit of improvement even is when they gradually really relax
a pandemic control measures. Of course the zero carbon policies are not going to stay this time for you know for the next six to
12 months. We think they do is on the way to gradually be. We know that the correlation between that GDP target is always
to maintain stability in the labor market. We know that NIKKEI has expressed his concerns over how grave and complicated that
situation is. Do you think they can object that they can achieve the objectives when it comes to maintaining jobs and stability.
Well I think that it is possible that we're seeing that the labor market is stabilization with the help of some more
targeted measures of some ease. And also you know from Social Security perspective to help us not only to small companies but
also bigger ones. But I would say that it is important to keep in mind that labor market is a lagging indicator. That means we
need to first to see credit expansion coming back. And then we may see you know after a three to six months some activity will
indicate a restoration to to see prices up Covid levels. And last we could see maybe some labor market improvement. So it
would take time. But at the moment I'm clearly saying that clearly that policymakers are very much on top of that. And we
think that will be the most important thing. The priority at the moment should be set to to get a credit back on.