00:00I would say that there are probably two major takeaways.
00:02The first one is that most of the growth was probably still contributed by the external sector.
00:08And the turnaround, for example, in IP in June pretty much proves that activities in the manufacturing sector were holding up okay.
00:16But that was probably largely attributed to, should be attributed to the external part.
00:21And that's probably related to the trade war truths and also the front-loaded orders potentially.
00:27Because at the same time, if you look at investment and consumption proxies, they're not necessarily doing too well.
00:34So I think the first and most important reading is that growth has been holding up, but to a large extent helped by the external demand still.
00:43So China remains to be dependent on the external part.
00:47And the second thing is that overall speaking, growth still seems to be pretty weak on the domestic end.
00:52Not only the numbers we just received on retail sales.
00:55Yes, of course, it's probably affected by the 618 shopping festival being brought forward this year.
01:03It's probably also affected by the temporary hot of the trading programs, the subsidies by local governments.
01:11It went on and off for a little while.
01:13However, there is no denial in the fact that overall demand must have been weak underlying in the data so that CPI inflation was barely struggling to stay above zero.
01:26And that's adding to the retail sales so that as a nominal number, it's now in the forehandle.
01:34What's needed then, right?
01:35You mentioned if subsidies in the consumption space, you're going to start to fade in the second half.
01:39What is it needed then to boost that consumer confidence in this economy again?
01:44That's a billion-dollar question, Iman.
01:46I keep asking you every time.
01:49Well, I think that the policymakers and observers, scholars, everybody is still talking about this big time.
01:57But I think the consensus is that for Chinese consumers to feel more confident to spend, it is not enough to just give them some cash and say, oh, here is a coupon and go out and spend.
02:09This is for every 200 yuan, you can deduct a 30 yuan or something.
02:13So it's a big coupon.
02:15That's not enough because people may not see it as sustainable.
02:18I think that for consumer spending to come back more sustainably, basically we need people's expectation on their income and future income to come back.
02:30So that is the most important part that is linked fundamentally to the labor market outcome.
02:36And what part of the economy links to the employment situation?
02:40If you had to pick the external environment, if it's domestic consumption and chicken and the egg there, what is able to boost job prospects looking at the next, let's call it two years?
02:50Well, yeah, this is all linked, right?
02:53You know, the investment returns have been relatively low.
02:57People are worried about, you know, investing today and not necessarily reaping, you know, a high return in the longer term.
03:04If investors are not investing, then who is going to create the jobs?
03:08So I think that, you know, oftentimes yesterday we were at this forum and we were having this debate.
03:14People are talking about boosting consumption being the most important priority for China.
03:19But, you know, my view is that it's even more important to boost investment, especially to create those high paying jobs.
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