Bloomberg Opinion: Is China's Economic Priority Shifting?

Julie Wren joins us here, our Bloomberg Opinion columnist. She actually thinks in her latest column that the priorities of Beijing are finally shifting from industrial upgrades to boosting domestic demands. Talk, talk us through this. I think the sharp drop in home sales is perhaps freaking out even Beijing's top policy makers. I mean, let's just look at the numbers at the It's a 2021 peak, China registered over CN¥16 trillion of home sales. Last year, it was 10 trillion. It hurts, but perhaps President Xi Jinping could tolerate it. But this year we're looking at maybe 7-8 trillion yuan of home sales at best. So what we are seeing is that suddenly China economy is having a CN¥8 trillion hole and then when they look around, there are just simply no alternative sectors to fill that hole. For instance, China's car sales is doing super well, right? We know the EV is ahead of everyone else wanting 5 EV sold in Europe is from China. But even that auto sales is just about CN¥5 trillion. It's not big enough to fill. China basically has to come up with a second auto industry to fill the drop in home sales and there's just none. So I think they're freaked out about that. What what is still needed to to boost that domestic demand, though? I mean, a lot of things like, for instance, like that, that that youth unemployment is a problem, right? Like, even if you're middle class parents say people in their late 40s like me and I look at my kids, I'm like, I'm not going to spend because I have to not think, not only think about their future education, schooling, I also have to think about what if they have no jobs in the next 30-40 years to support them. So that is something that the government has to tackle to find jobs for China's new university graduates. And how do they do that? Like what in their toolkit do you think is most useful to encourage, you know, the upping of industries and capacity to to create those jobs? Definitely not in the industrial sector. Young Chinese do not want to go working factories. They want to work in offices. Perhaps we we have to talk about consumer tech again, right? We have to talk about services sector, media companies, maybe a little bit of high end tourism, but not the low end, you know, tour guide kind of a tourism. So, so it is a tough task, but not in the industrial sector. You mentioned about exports or the saving grace, but really it's still not enough. It's not at this point, yes. And then what people are realizing is that whatever President Jinping is saying, China's economics still follows the US business cycles. We are seeing a soft land in the US, Therefore, China's a new export orders are coming up. That's no good. That's why I think it's very, very important for China to have a bigger consumer society. Without a strong consumer base, China can never be the superpower he wants to be.