China still seeing growth despite challenges, ADB chief economist says

Well, I was actually in China a couple of weeks ago at the Bow Forum and also in Beijing at an event. And I think the government is, is is trying to convey a message that we’re open for business, that we will only become more open to FDI, not less open in the future to reassure foreign businesses. And we saw some corporate leaders attend the China Development Forum a couple of months ago in in China. But unfortunately, we still I think sense that there’s a lot of. Caution A lot of concern about. Government regulatory policies, uncertainties, also geopolitical uncertainties, especially investment is coming from the US or Europe. And so I think. People need to see the actions really being implemented and hopefully. We’ll see, you know, return to kind of normal, more normal patterns of FDI into China going forward. Talk to me about what’s happening in Japan as well. We saw the yen testing 160 this week. It’s tracking at a 34 year low, huge depreciation there. What do you think’s driving this? Is it policy divergent based on what we’re seeing out of the United States, perhaps a long term trend there or is this a problem of Japan’s own making? Well, China, I mean sorry, Japan is still trying to keep a accommodative monetary policy to support growth recovery. You know, we’ve seen the growth slow down there as well. So they’re balancing interest, but we’re seeing depreciations of currencies throughout the Asia region and it’s really related to the strong dollar and the higher interest rates in the US And so I think eventually you know whether it’s this year or next year, hopefully this year when the US then starts to reduce interest rates then. It will normalize some of the. The currency exchange rate shifts that we’ve been seeing this year in a lot of central banks, central banks are keeping interest rates. High because they want to wait to see what the Fed does. And one consequence of that is that because inflation does continue to moderate, real interest rates in a lot of Asian countries are actually increasing over over time. And that of course makes it more expensive to make investments and other things. And so it does slow down growth and recovery. But people really are worried about. About the other issues related to inflation. Financial flow. So they don’t want to beat the Fed, you know, to the punch.