Now keeping us on top of the latest in China's economy is Dan Jog She's chief economist at hang Sing Bank China. Great time to have you on the show. You say that easing COVID restrictions is going to make things worse before they get better. I think is that because COVID cases are going to rise and that's gonna be a problem, or do you think they're not doing
this right or that it's not gonna last well. As the winter is approaching, um COVID cases will rise quite significantly, and there is a concern that there might be a
hospital run in major cities in China. Uh and right now there are also a lot of confusions on what the real relaxations are because in places like Beijing and Shanghai, supposedly we don't need a health code or COVID task to get into public transportation, but if you want to get into office buildings, it really usual they would require twenty four hour our PCR test. So there's a lot of inconsistency there. Yeah, and that's one of the questions
that I've been asking. It really is the degree to which we could see the health care system in China stress to a point that it nearly breaks. And what you're saying is that that that that is a huge risk right now. But for the government's credibility, which is
very much on the line. When you think about not only what's happening domestically, the stress that people must be under in these large cities, what they've endured for the last three years, but the companies who are outside of China trying to get a sense of how they can conduct business within the mainland. I mean, this is going to be confusing, not just domestically, but on the global
stage as well. Oh. Absolutely, when we talked to for investors, be its in financial market or in the real economy, especially in UH supply chains like new Enity vehicle all it just seems that China's demand has been fundamentally weakened and there are no aggressive rescue package similar to the size of the two financial crisis um. And then for the central government, now this is a transition period before the new leaders are in place in the coming March.
During the two sessions, there wouldn't be any drastic policy reversal um and we wouldn't get very clear policy signals either. And for domestic investors, they are anxious to see when, for example, the interest rate can be lowered, because for many of them the liquidity is drying up with the prolonged COVID lockdown. And for foreign investors there's also a question on whether China is still welcome for investments in general.
You think that the property market is going to be a source of growth this year, what do you see happening there. The property market has been the pillar industry for China in the past twenty years, and this year
it has been quite depressed. The housing sales has been contracting for about thirty depending on the cities you're in, and next year it just seems that the government is eager to UM assemble this rescue package amounting to about one to two trillion R and B, and those money will not be, of course, all spent within one year. It probably will be spreading over the three year period UM. But it seems that most of those money will be
as a liquidity provision for the realistic developers UM. For the demand side, there are a lot of pessimism about when the housing market can really turn up. The consumers and home bias really need some clear signal on whether UM the COVID control will come to an end in and right now that signal is not entirely clear um, But for infrastructure spending in China it is coming to an end. And for the only thing that still get
a momentum is probably housing. Yeah, I'm wondering Dan, very quickly, in about forty seconds or so, do you think it's possible that Beijing reverses itself on some of the measures that we saw as it relates to consumer facing tech companies that crackdown, could they relax restrictions a bit to allow the industry to resuscitate or to be resuscitated as a way of driving growth very quickly. Oh, the signal is not entirely clear yet. But for the gaming companies
there are some welcoming signs. For example, some of the games by Tensent got improved. Um. But I don't think it's the end of the regulation yet. For internet companies, they still need to wait before the two sessions we can really be sure. All right. Well, Dan Wong, chief economist at Hangsang Bang China, thank you so very much for your insights, particular review of how slow the turn away from COVID zero. Maybe as cases spike of covid this winter