- ORIGINAL NEWS
China’s biggest problem is a ‘lack of confidence,’ Standard Chartered CEO says
- SUMMARY
China faces a confidence crisis amid its extensive economic transition, triggering concerns over the ongoing property crisis.
International investors and domestic savers lack assurance, leading to problems in China’s economy.
The demand for new housing is predicted to drastically decrease by 50% in the coming decade, according to the International Monetary Fund (IMF), making it harder to absorb excess inventory and hampering growth.
Reforms are necessary to address long-term structural issues, especially in real estate and the pension system, to boost domestic consumption and reduce export reliance.
The CEO of Standard Chartered, Bill Winters, is optimistic about China’s long-term prospects, highlighting that economic transitions bring challenges, but the country aims to manage the transition without severely disrupting the financial system.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“Decreased demand for new housing will make it harder to absorb excess inventory, “prolonging the adjustment into the medium term and weighing on growth,” the report said.”
“Property and related industries account for about 25% of China’s gross domestic product.”
“We want to see the economy genuinely moving more towards domestic consumption, and less reliance on exports … but for that, [they need] confidence of the consumer,” she said, echoing Winters’ sentiments on domestic confidence.”
“”And that means fix the real estate, get the pension system in place, as well as these longer-term improvements in the fundamentals of the Chinese economy, would be necessary.””
Negative
“Investors are closely watching China, whose stock market gyrations, deflation problem and property woes are casting a shadow over global growth outlook.”
“According to the IMF, demand for new housing in China is set to drop by around 50% over the next decade.”
“China is facing a confidence deficit as its economy undergoes massive transition and concern grows over its ongoing property crisis.”
“China’s biggest problem to me is a lack of confidence.”