Chief US Economist at BNP Paribas and director of Central Bank Policy Research at SGH Macro Advisors discuss US economy and China impact. CEO of Everest talks insurance and Hawaii wildfires. CEO of Marcus & Millichap discusses commercial real estate. Jen Bartashus breaks down Walmart earnings. Chief Geoeconomics Analyst at Bloomberg Economics discusses potential China property crash. Head of Commercial Banking at Citizens Financial talks about the state of banking in the US.
China's economic challenges are unlikely to have a major impact on its geopolitical importance or foreign policy.
The outcome of the Taiwanese presidential election could be influenced by China's economic challenges and tensions between the two countries.
The Biden administration's approach to China is expected to remain unchanged despite China's economic struggles.
Deep dives
China's economic challenges will not significantly impact its geopolitical importance
Despite China's economic challenges, it is unlikely to have a major impact on its geopolitical importance or foreign policy. Historically, rising powers have lashed out when facing economic pressure, but this does not seem to be the case with China. While China may be more defensive, a major foreign policy crisis is not expected.
The impact of China's economic data on the Taiwan situation
China is closely monitoring the Taiwanese presidential election, particularly the leading candidate, Lai Ching-te. Lai is not Beijing's preferred candidate, and should he win, it is uncertain how China would react. China's economic challenges could have implications for the Taiwan situation, given that Taiwan is nearby and tensions exist between the two.
The Biden administration's approach to China
The Biden administration views the relationship with China as a strategic rivalry that requires intense engagement. While engaging Beijing, the administration is also taking actions to defend US interests, such as implementing outbound investment screening. China's economic struggles are unlikely to significantly impact the administration's approach to China, as China remains a major power and continues to invest in military modernization and technological advancements.
China's economic challenges viewed positively by the Biden administration
China's economic struggles, with US GDP growth outpacing China's, may be viewed positively by the Biden administration from a political perspective. While the administration's overall approach to China is not expected to change significantly, they may emphasize the strength of the US economy in light of China's economic challenges.
Impact of the Pandemic on Commercial Real Estate
The CEO of Marcus and Millichap, a New York Stock Exchange traded company, discusses the impact of the pandemic on commercial real estate. He highlights the shrinking demand for office spaces and the significant rise in vacancies for older, obsolete office buildings. He also emphasizes the importance of time in addressing the situation, as people gradually realize the negative effects of working remotely all the time. To attract more workers back to the office, companies are focusing on amenities and alternative strategies. While there is concern about a potential recession, the CEO explains that distressed office spaces do not pose a significant threat to the entire banking system.
Outlook for Commercial Real Estate and Loan Performance
The CEO discusses the outlook for commercial real estate and loan performance. He notes that while there are challenges in obtaining commercial real estate loans, there is still capital available, although at a higher cost. Construction loans are difficult to secure due to the high price of debt and rigorous underwriting. The CEO highlights that outside of office spaces, other segments of commercial real estate, such as apartments, shopping centers, self-storage units, and hotels, are performing well due to a strong economy. He also addresses concerns about building owners refinancing their debt, explaining that distressed borrowers can often work with lenders to avoid a fire sale, and financing is available for assets that are performing well.
Carl Riccadonna, Chief US Economist at BNP Paribas, joins to discuss the economy and how a China cold could affect the US. Regina Schleiger, director of Central Bank Policy Research at SGH Macro Advisors, joins to discuss the Bank of Japan. Juan Andrade, CEO of Everest (NYSE: EG), joins the program to talk insurance and industry trends, as well as Hawaii wildfires. Hessam Nadji, CEO of Marcus & Millichap (NYSE: MMI), joins to talk about commercial real estate and mortgage rates. Jen Bartashus, Senior Industry Analyst at Bloomberg Intelligence, joins to break down Walmart earnings. Jennifer Welch, Chief Geoeconomics Analyst at Bloomberg Economics, joins to discuss her column on a potential China property crash and the potential fallout and geopolitical risks. Don McCree, Head of Commercial Banking at Citizens Financial, joins to discuss the state of banking in the US.
Hosted by Paul Sweeney, Jess Menton, and Simone Foxman.