00:00Le titre de votre report est «China l'économie n'est pas stalling, c'est pivotant.
00:04Obviamente c'est pivotant.
00:05Pour vous aider donc Ă avoir une bonneance de contrĂ´le.
00:07Comment est-ce que ça va prendre ?
00:10Ça va prendre un temps, et ne pas oublier que ça a commencé lors de la COVID-19
00:14quand on a la...
00:15A dual circulation policy.
00:16So I think China has been planning this for some time.
00:18And it's finally...
00:20fruits or taking effect so in a way I think China has been trying very hard investing overseas
00:25both as a way to digest some of the overcapacity domestic a also trying to
00:30reflect its capability of growing more broadly and more internationally so I think in a way
00:35this is helping China in the escalation of the tension around trade and tax
00:40tariffs yes but how long can the economy keep on relying
00:45on the old pillar and that is exports look at the trade surplus a record trillions
00:50of dollars in a surplus that is causing angst among trading partners no doubt
00:55so you have to pivot a little faster I think it really depends on not on China but on
01:00the rest of the world in their attitudes towards this right I think it's without a doubt that
01:04China's many
01:05manufacturing capability is beyond and above and the question is whether that is going to bear
01:10some unintended consequences in trade in local employment in
01:15politics I think that is the bigger question about well how much of the headwind we're going to see
01:20in 2026 from the rest of the world at the same time I always try to say that
01:25well the way how we see it is probably a little bit unbalanced well China is
01:30exporting a lot but that's partly because we're not digesting or consuming as much as we
01:35as we could or should so in a way I think the policy should be focusing more or acting
01:40faster in trying to boost China's domestic consumption yeah so the central economic
01:45work conference and the latest plenum in December or November and then
01:50now the national people's congress and the cppcc the long way the prior
01:55really is going to be boosting domestic consumption how are you going to do that without exacerbating
02:00the fiscal situation because by most accounts the local authorities do not want
02:05to boost fiscal spending I think that's part of the pivoting I mean yeah
02:10yes I do think that we should expand the fiscal deficit I think that's the first and foremost
02:15I've been advocating for in such a low interest environment we should be a more
02:20aggressive I mean breaking the bank so to speak to increasing the ceiling of fiscal deficit
02:25but even if we were to keep the same fiscal deficit I think there are at least two routes
02:30through which we could make it more balanced and more effective one is I think we should be more
02:35effective in providing social welfare programs and trying to be more active in targeting
02:40in those lower incomes or less privileged stratus of the society so I think the
02:45the marginal propensity to consume for that group is much much higher for people who already have
02:50one or two houses in leading cities so I think that is one direction I have been advocating the policy
02:55makers to make two is I think I mean there has been some discussion about trying to subsidize
03:00subsidizing consumption subsidizing in interest payments for mortgage so that you can
03:05free up some of the the the the purchasing ability from Chinese households and the
03:10and finally there is one very peaceful powerful piece of advice which I think is
03:15expectation how can you stabilize the confidence try to improve the expectation so people are
03:20more willing and more encouraged to spend the confidence game how do you boost how
03:25so confidence because they're holding on to their savings because their paper wealth because of their
03:30household a value has gone down so it's a chicken and egg thing which one do you resolve
03:35first right do you get people to spend or do you boost their confidence how do you
03:40begin to put a floor on the property dilemma
03:45I think that's a harder question I think I probably have an easier or better solution
03:50which is the equity market the A shares market okay yeah I think it's not very easy to
03:55fix the property problem I mean after all it was a bubble and you always have to live through
04:00some of the painful adjustment and moderation after the collapse of the bubble but
04:05and now I think in Chinese households their their home assets are pretty
04:10much concentrated in either houses or equities I believe it's used to be a making
04:15much smaller fraction than it is now so with hopefully a slow yet
04:20sustainable bullish run in the A shares market hopefully we're going to see some improvements in not
04:25only the wealth effect but also the confidence associated with that okay well the A shares have been doing
04:30pretty well so far um also the renminbi has appreciated we've seen it on the
04:35you know the daily fixing is well today was a little weaker but again the trend has been
04:40you know stronger than seven so six point nine and change how much further will the Chinese authority
04:45allow that to happen given the deflation cycle is still pretty entrenched
04:50yeah I think first and foremost I'm very encouraged to see that uh our
04:55is going through this a two-way fluctuation I mean because we had that uh reform of exchange
05:00mechanism about a decade ago I think it's really nice to see that the market is now playing
05:05a greater force in setting the exchange rates I mean of course with the intervention of Chinese government
05:10uh but I I expect there's further appreciation or strengthening in the R&B in 2020
05:15although probably not as much as people were hoping for people from outside China
05:20I think we have to keep in mind that uh foreign exchange plays a very important role in China
05:25in China's ability to export and given exports importance to China's GDP in the past two three
05:30years I think it's very hard for China to experience a large uh appreciation uh
05:35and maintain its ability to export and also related to what you just described I think
05:40a bigger level a higher level of appreciation is going to uh it into
05:45greater deflationary pressure in China's domestic situation which I think is
05:50related to the confidence problem that we're talking about so I think those all matters are somewhat interlinked
05:55and we I think we have to be very careful with going into one direction but not too much
06:00too fast how much longer will the AI boom happen I do know that authorities have come down
06:05and cracking down a little bit on or tightening up the restrictions on listing requirements
06:10here in Hong Kong because so many AI companies have come here to list because they want to take advantage
06:15of this boom how long how much longer does it have I think it will still run for quite some time even though probably
06:20is less uh enthusiasm in a way I think the the run up of the capital market is trying to
06:25encourage China's AI uh entrepreneur activities and trying to use that to compete
06:30with the U.S. eventually from a national security perspective so in the direction I think that will pursue
06:35it will persist but then given how much enthusiasm has been poured into that in the past 12 months
06:40I think the regulator is right in trying to curb some of that enthusiasm try to sustain
06:45and maintain is a longer and gradual run bullish run in the market
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