General signs of stabilization in China except for the property sector, economist says

Jibe Jiang is the President and Chief Economist at Pinpoint Asset Management are joining us with his take on things. Jibe, how are you? How are you reading into the services data, which still seems very stable and manufacturing seems to be slacking at a time when, you know, you look at the export growth, the import growth numbers have not been so off. That’s right. I would say you know do cry all these indicators and a lot of mixed signals, but the general message seems to be a stabilization except for the property sector. Now the consumption side, the, the retail side numbers are not great, but they’re now folding off sleeve, folding off the cleave. If you look at the sequential growth, they are OK. I would say export has been helping manufacturing side, I mean domestic demand you you you observe you know inventory building up in some of these sectors, but I think the the, the external demand is still pretty strong. So China managed to rely on the exports to actually sustain the the production on shore. Now the the one weak spot that we worry about is property and and we haven’t seen any signs of stabilization yet. We’ve seen a little bit of change of policy. So that’s encouraging, but people are all waiting for, you know, the first sign of stabilization of property sector, which would be very important and what would be the early indication of that? Do you think it would be coming through a price stability where we have seen home prices continue to decline? Yeah, price stability and also property sales because we observe very high frequency data, right. So weekly data or even sometimes you know, anecdotal evidence of a new property launch in some city gets sold out very quickly. That kind of signals would be very helpful. But I think in the past few days the market has been focusing on the signal coming from the political Bureau meeting last week that the government started to talk about oh they they need to deal with the inventory of unsold properties. That is a the interesting signal. They haven’t talked about it before whether they will do something maybe setting up some facility to you know help the the the developers to sell those property, we don’t know. I mean I I think the market is waiting anxiously to find out what the government really means about that. So right. Can I just ask you because in in terms of how you look at the I suppose state, let’s just call it the last quarter’s worth of data coming out of China. Have you seen anything that would if everyone’s concerns were purely on the economic standpoint, have you seen anything that would justify purely based on economic data the, the rally we’ve seen in the Greater China and mainland markets of of late, has there been that much of an incremental improvement in your mind as to the the health of the Chinese economy? Yeah, good question. I get asked for quite a lot recently. I would say the the economic momentum if you just look at the the pure, the the data right fundamentals each stabilized. I think in the past 2-3 months there has been some green shoots right. So that you know PMI data and so on particularly the the the really strong data points is on exports that helped to boost investor sentiment and we’ve seen global investment banks revising up their GDP forecast for China for for this year. I think that revision happened about in early April that I think to some extent helped to to boost the sentiment in the market. But you’re right the change in the economic fundamentals is not huge, right. So, but the the, the rally in the market is much stronger than than that. I think it’s a change of sentiment that earned from super bearish to right now I would say neutral. I wouldn’t say that the outlook for the economy is is very bullish or a very sharp visionary, Toughly observed is it’s not like that.