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00:00So that's the question. What do we do next? What happens next? Well, next, I think they will just continue to do the easy to while unwind and many of those zero Covid policies. That's crucial, isn't it, here? What do you think is in terms of policy? I think it made 20 moves towards easing compared to 30 that they made in 2020. In the beginning of the pandemic, are they doing enough? Because I mean, cutting tourism to the triple R by 25 basis points is nothing. So it just moves. It doesn't really move the needle, does it? Well, I do. But if there's a financial side of policies to well, be useful. But maybe they will prevent this like defaults of developers, but they are not crucial. The real precondition for the Chinese economy now is just to end the zero Covid or as soon as possible, of course. But in the meantime, just to make sure that there will be no big disruptions to factories and supply chains because the narrative in China and today is still that it is well front of ISE court disease and it may be deadly. But the Chinese communist candidate narratives and then, of course, speed up the ending of the auto club. It doesn't ask you what you did last week, the downgrade growth for this year or next, 2.8 percent for 2020 to 4 percent for 2023. We often talk about the cost of Covid 0 win over the top of the costs of reopening. You're saying it could be costly? How so? Well, not if we take a look at, well, the economist and some of the other parts of the work. Well, what about Albany in Vietnam, for example, in the third quarter of 2010 to while the economic growth was minus 6 percent. Now, of course, because of, well, the surge of coal it at that time and eventually they just choose to leave, which was Covid. But the road to the floor reopening could be a costly pick. Why? Because while Chinese people so far are, we'll protect it. That was no search of chronic the virus on a scale of other countries yet. And many people still believe krona y virus will cause serious disease. So that's why search of Covid cases in China will likely bring about some disruptions to factories, to a supply chain to transport. So that's why we need to be cautious about this and try to change the narrative. Jason RTS, but also has created a social stigma, hasn't it, in China, too. But this is a more contagious, less virulent disease than it was at the beginning of the pandemic. That may play a role in all this, but it's interesting how Jay Powell was also mentioning how these lockdowns are affecting supply chains globally. It was something that they were monitoring very closely, the Fed Reserve. Well, what lockdown was in the beginning? Yes. Affected supply chance on a negative side. But actually, well, China's 0 Covid policy. Let's just give the UN like big credit for much of 2020 and 2021. They actually provide a very stable supply chain for the whole world. I think at a turning point towards the end of 2021, when coal will become much more infectious. When doubt becomes only them, China's strategy of zero Covid become a not so perfect strategy. That's a real turning point. That's why, well, zero Covid it become kind of like, well, even a negative factor for global supply chain, especially if, for example, during the Shah had locked down a penny. You're starting to hear that sort of disconnect between what the central government has been talking about and what local governments did. And it seems like Beijing was trying to distance himself and then blame that some of these copper restrictions and city by city, district by district, have maybe gone too far. You're saying this isn't like a prisoner's dilemma case where a little bit more about that, the communication challenge here? Well, I think the challenge here is not first of between central and local governments. Local guards really want to know what's the real that performance measure by the central government? What's a KPI about 0 Covid about GDP. And they also really want to know what's clear instructions from Beijing. But sometimes maybe it's not so clear. So then what local officials may want to do, others are the most important, a task which of course, has been about zero Covid. So that's why. Well, they engage in this kind of well, I put this dilemma. Why? Because nobody really wants others to be too tough in this regard. ISE. Covid. Why? Because the economy would be bad, but they really want to achieve. Well, zero Covid in his region. So that's why eventually we got this kind of like trap. But whatever savings it does, it does it also. Then, you know, with these lockdowns, you have masked the bigger problem of what's going on with the Chinese developers, that this is a problem which remains because it's one of the vital engines of growth of the economy. And that's going to remain in the doldrums for the foreseeable at least. Yeah, definitely. Well, to be fair, I think the sharp decline over the property markets since spring last year was not really well. RTX has not mainly because of zero it. I think it's because of the three red lines and two red. All this kind of financial curbs imposed on developers in the first front beginning of last year. But at this moment, even the Chinese government has scrap almost all of those curbs, financial curbs. Well, we are yet to see a real recovery of the property market. Why? Because there's another very important precondition. Well, they need to end the zero Covid. Otherwise, if people is under lockdown, if they have, what if they don't see a future for their income significantly? Well, affected by the lockdown measures, then they won't go to the market to buy new homes.

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Nomura's Lu on China's Economic Outlook

Ting Lu, Nomura International Chief China Economist, discusses outlook for China's growth in 2023 and the effectiveness of the property stimulus measures. He speaks on "Bloomberg Markets: Asia". (Source: Bloomberg)

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