Three experts, Wei Yao, Stefanie Holtze-Jen, and Lindsey Piegza, discuss China's economic outlook, APAC markets, and US CPI data. Topics include China's struggle with surplus supply, labor market forces, currency management, inflation concerns in the US, and the impact of debt issuance on the economy.
China faces deflation from supply excess, needs consumer focus for sustainable growth.
US export controls impact China's AI development, relaxing trade barriers could ease tensions.
Deep dives
Challenges of Addressing Deflation in China
China faces challenges of persistent deflation due to lack of domestic demand and excess supply, particularly evident in the housing sector. The current policy focus on supply over demand exacerbates the issue. Balancing policies to stimulate consumer spending and address overcapacity is crucial for sustainable economic growth.
Implications of US-China Trade Tensions on Policy Making
US export controls and restrictions on high-tech technology access impact China's development in AI. Chinese policymakers respond by doubling down on supply-side strategies, potentially worsening tensions. Relaxing US-China trade barriers could encourage China to rebalance policies to support demand and address deflation.
Stimulating Chinese Consumer Spending and Housing Market
Efforts to boost consumer sentiment include initiatives like subsidizing appliance upgrades and enhancing social security systems for long-term consumption growth. Addressing trust issues in housing developers and providing fiscal support to households are essential to revive demand. Keeping housing prices affordable and increasing market transparency are vital for consumer confidence.
Wei Yao, Head of Research & Chief Economist, APAC at Société Générale CIB, sits down with us in Hong Kong to discuss China eco outlook. Stefanie Holtze-Jen, APAC CIO at Deutsche Bank Private Bank, joins the program to discuss APAC markets. Lindsey Piegza, Chief Economist at Stifel, sits down with us to discuss US CPI data.