Latest / Best of Business / Peter Lewis: Asia business correspondent says China's economy shows signs of strain

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Peter Lewis: Asia business correspondent says China's economy shows signs of strain · Best of Business

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  Speaker 2: Killing. Welcome back to the program. And so the battle
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  Speaker 2: continues on the text ninety two ninety two small charms
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  Speaker 2: appliers about whether a duty lawyer on one hundred and
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  Speaker 2: eight dollars an hour as well paid or not. And
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  Speaker 2: of course we've got some people who are kred givers
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  Speaker 2: saying I'd kill for that sort of money because they're
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  Speaker 2: on less and we know that. And we've got another
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  Speaker 2: text in here saying, Dicken's a caregether doesn't go to
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  Speaker 2: law school for five years and come out with a
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  Speaker 2: massive debt. So that is a stupid comparison, but that
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  Speaker 2: is true. But at the same time, a caregether lives
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  Speaker 2: with the person that they're given care with, possibly for
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  Speaker 2: all their lives. Many caregivers never work at all and
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  Speaker 2: can never work at all because they have somebody that
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  Speaker 2: they have to give care too and it's not their choice,
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  Speaker 2: and it is a full time profession. And the work
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  Speaker 2: they do is very important because it saves the state
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  Speaker 2: from the money spent from institutionalization so that's not a
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  Speaker 2: fair comparison either. The duty lawyer is doing something of
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  Speaker 2: their own volition and of their own choice, but many
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  Speaker 2: caregivers have not been given the choice. It's their familial obligation.
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  Speaker 2: And really if they were given the choice and they
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  Speaker 2: could actually make that decision, they wouldn't be doing what
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  Speaker 2: they're doing. At the same time, both of them, the
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  Speaker 2: duty lawyer and the caregiver, are doing God's work and
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  Speaker 2: I thank you for that. It is twenty two to seven.
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  Speaker 2: After Asia we go Peter Lewis, good evening to you.
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  Speaker 3: Good evening, Antrew.
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  Speaker 2: So China's economy. We're always looking at China's economy. It's
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  Speaker 2: got a bit of strain. Considering the whole tarer for
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  Speaker 2: and considering everything, it's been doing well, but it's showing
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  Speaker 2: signs of strain. In November it is indeed.
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  Speaker 3: I mean, if you look into the details, we had
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  Speaker 3: a whole load of data on fixed ass's investment, on
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  Speaker 3: retail sales, on industrial production. I think the most worrying
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  Speaker 3: thing is fixed acid investment actually, which has now declined
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  Speaker 3: for the third month in a row. Now We've never
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  Speaker 3: seen that before. Since data was first published by China
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  Speaker 3: on its economy. Normally, there's been a lot of interest
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  Speaker 3: in investing in China, but what this is now term
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  Speaker 3: negative and it shows that both businesses and households just
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  Speaker 3: don't want to invest at the moment in the Chinese economy.
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  Speaker 2: Now.
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  Speaker 3: One of the main reasons for that is this slide
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  Speaker 3: in house prices, which we've seen now for four years,
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  Speaker 3: NonStop investments in property down about sixteen percent from a
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  Speaker 3: year ago, and that's being transmitted more to the consumer side.
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  Speaker 3: What consumers are doing is they're looking to pay down
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  Speaker 3: debt at the moment rather than spend money and build
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  Speaker 3: up new expenditure. So this is going to be a
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  Speaker 3: challenge for China next year because Rejijingping wants to reorientate
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  Speaker 3: the economy towards more the domestic side and less reliance
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  Speaker 3: on exports. Many overseas countries have called for that as well.
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  Speaker 3: They're saying we had Immanual Macron in Beijing just last
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  Speaker 3: month saying that the pain that's all this reliance and
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  Speaker 3: exports was causing to overseas economies was unbearable, and the
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  Speaker 3: IMF has called for China to rebalance its economy over
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  Speaker 3: the coming months. More towards domestic consumption. So this is
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  Speaker 3: going to be the big challenge for China next year. Now,
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  Speaker 3: in some ways, I mean, you know, it's in a
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  Speaker 3: good position to be able to do that. If you
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  Speaker 3: look at this economy overall, it's growing at five percent
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  Speaker 3: year on year. Now that's a good rate of growth.
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  Speaker 3: Many countries will be would love to see that sort
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  Speaker 3: of growth. But it's very very lopsided, relying very very
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  Speaker 3: heavily on exports. So this is going to be the
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  Speaker 3: big challenge for China in twenty twenty six.
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  Speaker 2: Absolutely, the Chinese tiger, though, has been going great guns
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  Speaker 2: over the last fifteen twenty years. But Ji Jimping gave
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  Speaker 2: a very interesting warning to his officials because he doesn't
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  Speaker 2: want them to chase what he would call reckless GDP expansion.
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  Speaker 3: Yes, indeed, and he's talking a lot about in particular
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  Speaker 3: reckless sort of themes like large industrial parks, building all
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  Speaker 3: these unnecessary cities, of some of which he's promoted. He
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  Speaker 3: promoted a huge new mega city south of Beijing which
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  Speaker 3: was supposed to eventually take over from Beijing, but that
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  Speaker 3: never really happened, and all that's there is empty apartment
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  Speaker 3: blocks and empty empty factories. But he wants an end
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  Speaker 3: to that, and he wants sort of economic plans to
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  Speaker 3: be based around sustainable long term gains, particularly trying to
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  Speaker 3: boost the sort of green economy, and he wants to
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  Speaker 3: change the way in which local government officials are evaluated.
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  Speaker 3: He said they shouldn't be judged on GDP growth rates,
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  Speaker 3: but on broader achievements such as improving people's well being,
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  Speaker 3: maintaining stability, on so on. This bit reminds me a
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  Speaker 3: little bit of Bhutan's measure of its well being by
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  Speaker 3: gross national happiness rather than gross national product. But he
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  Speaker 3: wants he wants to change the whole way in which
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  Speaker 3: officials are measured so that they're not tempted to chase
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  Speaker 3: sort of unrealistic growth targets and using unsustainable methods and
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  Speaker 3: fake statistics and the likes to achieve that. So he
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  Speaker 3: wants sustainability and more long term goals in the economic
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  Speaker 3: growth environment.
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  Speaker 2: Well, it helps when you have a domestic market of
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  Speaker 2: like one point two one point three billion people that
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  Speaker 2: you can survive on that. And they've seen the shocks
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  Speaker 2: that have come from America, and they've also been developing
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  Speaker 2: while they've been doing all the export. They've also been
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  Speaker 2: doing all that incredible power network and as you say,
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  Speaker 2: sustainable green power production and building data centers and all
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  Speaker 2: that sort of thing. So they're quite self reliant. Quite
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  Speaker 2: a remarkable economy, it's been for another country, that's kind
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  Speaker 2: of Thailand, where things are not getting any easier. They've
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  Speaker 2: just dissolved their parliament and they're still in conflict with Cambodia.
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  Speaker 3: Yes, indeed, I mean Thailand has never really recovered from
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  Speaker 3: the pandemic. It's an economy that's very dependent upon tourism
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  Speaker 3: and it's just really struggled to get momentum behind its
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  Speaker 3: economy since that, since then, and that's the case today
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  Speaker 3: as well. It also has a rather unstable politically environment.
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  Speaker 3: The government has to rely on rather large, unwieldly coalitions
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  Speaker 3: and there's elections on a regular basis. Well, now we've
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  Speaker 3: got another one. The prime minister disaster to dissolve parliament,
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  Speaker 3: which the King has granted, so that means there now
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  Speaker 3: has to be another election within forty five to sixty days.
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  Speaker 3: Rather alarmingly, the Prime Minister Anatin is sort of turning
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  Speaker 3: to nationalistic sentiments. This often seems to happen with governments
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  Speaker 3: doesn't it around Asia, around the world actually, when they're
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  Speaker 3: fighting for their political survival. So he's sort of rather
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  Speaker 3: relying on these border clashes with Cambodia and taking a
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  Speaker 3: very hard line stance on that. He doesn't want a
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  Speaker 3: cease fire at all until basically Cambodia sort of capitulates,
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  Speaker 3: and I hope it will boost him that hard line
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  Speaker 3: stance in the polls ahead of the election. The problem,
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  Speaker 3: what is this clash with Cambodia is really disrupting trade
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  Speaker 3: at the moment and also putting tourists off as well,
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  Speaker 3: so it's not helping the economy. And there's a risk
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  Speaker 3: that if these migrant labor flows, which Thailand is very
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  Speaker 3: dependent upon, are disrupted, or even worse, if Donald Trump,
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  Speaker 3: who helped broker the peace agreement between the two countries,
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  Speaker 3: decides to reimpose tariffs on Thailand, then its economy is
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  Speaker 3: really going to suffer.
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  Speaker 2: Yep, thank you so much. Peter Lewis out of the Asia.
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