Is the Chinese Economy Defying Expectations? A Look at Sentiment and Trade

CGTN Europe spoke to Zhang Zhiwei, President & Chief Economist at Pinpoint Asset Management.

Transcript

00:00savings. Well, Zhang Jiwei is the president and chief economist at Pinpoint Asset Management

00:06in Hong Kong. Part of it is related to the economy. I think the first half of the year,

00:14the economy performed much better than people expected. The trade war didn't really bring

00:20that much damage to the economy. Exports continue to perform very well, and the economy actually

00:26grew stronger than the government official target of 5%. So the stability of the economy

00:36helped the sentiment in the market. I think that's a big part of it. And then the other

00:41part is geopolitical risk. I think people are less worried about further conflict between

00:48China and the US. The trade negotiation is going well, and there's a lot of development

00:55in terms of foreign relations. Even between China and Japan and Australia and many other

01:01countries, there has been quite many positive developments. So those developments really

01:08helped to improve the sentiment.

01:10There seems also to be a huge increase in the number of ordinary Chinese people that are

01:15investing on the stock market, doesn't it? Stirring the stocks, as they say in China. You look

01:20on Guangdong Road in Shanghai, and there are so many of them now investing in the stock market.

01:25Why do you think they're investing so heavily at the moment?

01:29Yeah, I think, you know, last year and first half this year, there was a lot of worries on investors' mind.

01:40I mean, they were worried about the economy. They were worried about the policy uncertainty. They were

01:45concerned about, you know, this ongoing conflict between the US and China, all kinds of things on

01:53their mind. I think in the past maybe three, four months, we got, you know, positive development on

02:00all these fronts. So it almost feels like, you know, the animal spirit is back. It's not just the regular,

02:09you know, retail investors. If you talk to the entrepreneurs nowadays in China. I mean,

02:16last year, I think there was a lot of doubt among the entrepreneurs that, you know, when they run

02:22their business, they vary a lot of things. This year, I think the message from the government is very

02:29clear that they, you know, support private entrepreneurs to develop their business. And we've seen

02:36that the animal spirit also coming back to the corporate sector. So there's really a, you know,

02:42just better sentiment and more economic activities on the ground that push people to become more

02:50positive. Do you think it's helped that trade tensions between China and the US have eased now?

02:57It helps a lot. I think the policy uncertainty in the beginning of the year was tremendous.

03:03You know, we as in the market, you know, global investors, I would say that all these conferences

03:11I've been to that, you know, people so worried about all these different scenarios of tariffs

03:17and how bad Chinese exports would perform. So far this year is actually exceeded expectation

03:24by, you know, large margin. And exports has been a, you know, the pillar for economy so far this year.

03:33So the, I think people are less worried about the, you know, people, I don't think people are that

03:39worried about a collapse of the economy. I think there are a lot of signs that showing the economy is

03:44so stable.

03:54You