China’s Economy Has Turned a Corner: HSBC

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June 23 (Bloomberg) –- HSBC Greater China Economist John Zhu discusses China’s just released June Flash PMI data, which came in better than expected, and what it means for the economy with Rishaad Salamat on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Got a number of 50.8. let's get a reaction.

John, thanks for joining us.

I think it was fairly broad-based.

It was a strong rebound in output.

Acceleration in new orders in general.

Overall, it seems the economy has turned a corner.

Wasn't it that bad before in the first place?

That might be down to inventories, as well.

Inventories number actually continued to contract this month.

On the whole, -- was it mean the numbers have contracted?

In a way, it is good going forward.

It suggests that manufacturers can increase out put if the market continues to sustain its current rate.

It does seem like the president's promise that it will not be a hard landing is probably ringing true.

It is a good sign that we have turned a corner.

It is still early stages of the recovery.

There will be questions over the sustainability and the general strength of the recovery.

Not least what we have seen when it comes to the reserve requirement.

Interest rates proper which could be used here as well.

For now, they're going to want to see whether the data matches the indicators.

They're waiting for a few more data points before and seeing what else they should be doing.

On the whole, you're right heard you have a lot of policy options.

Let's check in with what is happening with the credit data, as well, for may.

Some easing is taking place there, but tell us more about it.

The trend has been that the pboc has been trying to make sure liquidity is ample in the system.

For now, you have had a series of partial rrr cuts.

This applies to more banks through out the monetary system.

Again, it is in the trend of fine-tuning and many stimulus.

Nothing overaggressive from the authorities.

We'll probably have to see -- > otherwise they would have to keep that on the balance sheet rather than actually lending it.

It amounts to the same thing in some ways.

The cumulative impact that you've seen for the past couple of months has grown substantially.

It is going to be a while before we see data.

There tends to be a lag.

There could be more to come, i think.

There is some downside risk specifically in the property markets.

Looking at the currency, do you think it is fairly valued?

I think it is.

In terms of the volatility, it is.

Some people have cited the housing market as a biggest headwind for the economy.

Is it something you would go along with or is this being blown out of proportion?

There are certain signs that housing prices and housing sales are coming down.

Also, construction and construction investment is on a downward path.

In our view, the many stimulus

This text has been automatically generated. It may not be 100% accurate.


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