Bloomberg Daybreak: Asia Edition China's Xi Voices Support For Private Sector
Feb 18, 2025
President Xi Jinping recently backed the private sector as crucial for economic revival, amidst a backdrop of stagnant growth and state dominance. Experts discuss the hurdles faced by private firms in accessing credit, and the role of influential figures like Jack Ma in the market. The podcast delves into the impact of AI investments on stock performance and investor trust. Additionally, it highlights emerging challenges in the Asia-Pacific market, including tariffs and security concerns surrounding AI development, stressing the need for fiscal policies to enhance consumer demand.
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Episode notes
China Market Rebound Unsustainable
- The Chinese market rebounded, but fundamental economic problems persist.
- Earnings growth hasn't been sustainable, and stock price changes reflect valuation shifts, not earnings.
AI Monetization Challenges in China
- Cheaper AI models generate optimism, but monetization in China remains challenging.
- Chinese consumers are less willing to pay for software, similar to past piracy issues with Windows.
Xi's Meeting and Market Reaction
- Xi Jinping's meeting with tech entrepreneurs, similar to one in 2018, offered support.
- However, market reactions suggest these signals can be fleeting, with SOEs outperforming private sectors.