Andrew, thanks very much for joining us his partner at Brunswick Group, and here to talk about the outlook for China. And Andrew, we all expected a rough ride in terms of the reopening. That is indeed exactly what we're getting. Where do you see things heading from here? Yeah, well, I think we can take all of the statistics that are coming out of China with a very large pinch
of salt. Um. They're no longer testing UM, they no longer contact tracing, so numbers for infections UM a massively understated. And even though they say that nobody or hardly anybody has died UM, journalists who have been through hospitals, morgues, crematoriums report seeing bodies everywhere. UM. But this is going
to be chaotic. The markets were incredibly naive. I mean, I think they all thought that a lot of investors thought this was risk on that you know, you can have a couple of months of chaos and then the Chinese economy was going to snap back. And I think there's now a much more sober view has taken hold that. Uh. In fact, zero covid um has simply, you know, brought forward a great reckoning for the Chinese economy and that you know, the the endgame for COVID is really the
beginning of China's economic problems. So are we looking at this from the standpoint of a humanitarian disaster and that a number of people aren't vaccinated and thus um may suffer greatly because the virus will be transmitted rather easily now the end of COVID zero, or are we looking at more from a market point of view that it will just disrupt the reopening because we're not really reporting deaths or even case count in most countries around the world. Yes,
it's important in China because it's a change age. But is it more from the humanitarian side or just the difficulty in reopening the economy. Well, there's two things. I mean, arguably the end of zero COVID, this incredible flip flop, this this this U turn that they've just executed, had to do with the economic reality that they were staring UH into an economic abyss. The economy was in dire straits.
Of course you had these protests that broke out, but the decisive fact was that they're looking at an economy in ruin. Now you are going to have and in emerging from COVID a humanitarian disaster. I think that's pretty clear that they've decided to let it rip and get
it over with. The infections, the deaths, the anguish, the suffering, everything that the West has experienced, New York experience, Hong Kong experienced, actually, um, Europe experienced, and they want to get over that as soon as they can get it out the way, get back to business. But I think from the economic point of view, Um, you know, what I would say is that the this anticipation of a snap back to where we were revenge spending, you know,
a big bump in consumer demand is a fantasy. Uh it may, it may happen, But then reality is going to uh kick in, which is that they can't go back to the old method, the old model of growth, which is based on investment in infrastructure and real estate. They're going to have to revive investor consumer confidence starting at from a very very low base. Consumer confidence in China has been shattered by zero COVID. Yeah, it's going
to be an interesting journey. As you say, you can no longer rely on that old model of just you know, berzookers and building a way out of these things that We've heard a lot about dual circulation before the pandemic, but as you say, once that gathers itself, once the pandemic is behind us, what's what's the realistic looking growth
number for China? Well, you know, they they're they're probably looking at trying to bring bring things back to five percent or thereabouts, but you know, so much depends on leadership uh and and the economic system that they put in place. And frankly, the approach to COVID zero and the chaotic departure from COVID zero doesn't inspire confidence. It's been this top down, heavy handed command and control flip flop when what it's going to be required. As great subtlety,
I gotta sneak at a quick question. Does this threaten Shi Jinping in your view? No, I don't think it threatens him. Look, you know we've seen the way they're spinning this. I mean, first of all, they're not spinning it at all. They're just not going to be reporting on infections and not going to be reporting on death dolls. And don't forget he's spent the last ten years for witting in place a state that is designed to head off descent we'll have to leave it there, Andrew, but
thank you very much for joining us. Andrew Brown from the Brunswick Group. This is Bloomberg