00:00Well, Zhang Zhiwei is President and Chief Economist at Pinpoint Asset Management, and I'm delighted to say joins us now.
00:07Welcome back to the program. Good to see you. I mean, this looks very opaque to those outside China.
00:13Just give us a sense of how significant this two sessions is.
00:20Sure. Yeah, so this is probably the most important macroevent in China, actually in the first quarter.
00:27And in the market, investors take this very seriously, and every year at the same time, waiting for the Premier
00:35to give us a working plan that sets the tone on the policy guidance throughout this year.
00:43This is also the beginning of the new five-year plan period, right?
00:48So the working plan that we get tomorrow will also give us some indication about where the government policy priorities
00:57for the years to come.
01:00So I think this is important for different angles, right?
01:04So if you are an equity investor focusing on a particular sector, you certainly want to find out whether that
01:10sector is a priority for the government to develop in coming years.
01:15If you are, say, a commodity exporter, a country that trades a lot with China,
01:23you would want to know whether China will push up infrastructure investment and therefore drive up a global demand for
01:31commodities.
01:31So there are many angles to read the coming report.
01:36We will probably spend much of the rest of this program talking about the Middle East.
01:41So let me ask you about this two sessions set against this backdrop of unprecedented global geopolitical volatility.
01:49I mean, what does that mean for China and this two sessions?
01:54Yeah, I think, you know, every year there's some uncertainty, some macro risk that the policymakers will consider.
02:04I think last year it was the trade war.
02:06It was the tariffs that the policymakers had to take into consideration.
02:11This year it actually happened very quickly in the just the past few weeks that this oil price, this Middle
02:19East issue become became a major issue for, I guess, global policymakers.
02:25And I don't think the plan tomorrow will talk a lot about that because the plan, the document was prepared
02:34over a long period of time in the past several months,
02:36whereas this Middle East issue just happened in the past several weeks.
02:41So I don't think they will have, you know, detailed discussion on this particular.
02:46But I think they will make the policy framework flexible enough, I think, to leave room for the government to
02:58handle this kind of uncertainty.
02:59So if, say, commodity prices stay high for a very long period of time, what China should do?
03:05And also in the longer term, how to address the commodity security issue that China can become more self-dependent,
03:12depend less on imported oil.
03:15I think China is already moving in that direction, but that's probably getting that issue probably get more attention and
03:22probably be discussed more over the over the next week or so in these two sessions.
03:28How would you best describe China's current objectives and priorities, both domestically and internationally?
03:37You know, I think China is going through economic transition.
03:43I think the, you know, the challenge of the leveraging, there's the demographic challenge and so on.
03:50So there are macro issues China need to address domestically.
03:55Domestically, and I think China is probably halfway through this deleveraging process, probably in the second half of, I mean,
04:02a lot of this, that issue has already been handled.
04:06But we're not out of the woods yet.
04:09I think that's, there are still some challenges remain domestically, but I think they are getting handled.
04:16So externally, I think a big issue is about exports, about trade, because Chinese exports are very competitive.
04:24And how to maintain a very strong export momentum, but at the same time, keeping the trade relations with other
04:33partners in a healthy way and to make it more balanced and probably import more, right, from other trading partners.
04:40I think that's probably one issue to be addressed in the coming years.
04:46Zhang Jiwei, always wonderful to talk to you.
04:48Thank you so much for your time and your experience, your insight.
04:52Good to see you, Zhang Jiwei, the president and chief economist at Pinpoint Asset Management.
04:57Thank you, Zhang Jiwei.
04:57Thank you, Zhang Jiwei.
04:57Thank you, Zhang Jiwei.
04:57Thank you, Zhang Jiwei.
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