• 00:00Tell us some good news you give any of these days? It's very hard to find good news for China. Well, I think if any good news, I guess, is the market is in a full panic mode, people, and there's plenty of pessimism. So obviously, the market is pricing is reflecting this kind of very deeply negative sentiments. You know, the the probably the place that you mentioned, there are trading ads that pretty much like a call option at this moment. So I think if anything, if positive side, you know, policymakers obviously know the economy is clearly very weak. They need to the economy obviously needs some policy help. So they are just trying to announce measures to try to stabilize the economy. You just came back from China. You know, just being based in Montreal usually and being in the mainland on the ground. What did you see? Oh, yeah. It's it's actually it's a long trip. It is kind of my regular trip that I do every year. You know, I'm based in Montreal, but I need to go back to China to see what's happening on the ground. So I think observing from the ground, obviously the economy, you have a two speed economy, right? Do you have some pockets that are still quite strong? You know, the the catering business, the restaurant lobbies, the tourism sites, all these businesses are still quite strong. But on the other hand, obviously, if you talk to people, I think the biggest difference that I got this time compared with my previous trips is people feel a lot more pessimistic. So, yeah, so I think this is the key difference Why the Court Why Chinese policymakers have been trying to boost the growth cause demand about due to the economy has not been responding. I think confidence is really a very important factor here. And so, you know, overall, many of the growth signposts that we have been monitoring to to to try to try to monitor this post-COVID growth, recovery, consumer confidence, business confidence, demand for loans, all these things, they had a rebound. But now in the past couple of months, they are falling back, I think, from the ground. I can clearly sense that. So. Yeah. Well, how long do you think this two speed economy can sustain itself? Meaning, can can consumption still be at least a little bit more resilient to the weakness that we're seeing the property sector? Or does property end up dragging consumption along with it? Yeah. So I think I think if policymakers do not act aggressively, do not act quickly to stimulate to stabilize aggregate demand, I think, you know, now the economy will have will have the risk of further downside going downside. So I don't think the two speed economy with obviously we had a lot of aggregate pent up demand accumulated during COVID. So then that part of I think that's the first phase of the recovery. But if the economy does not stabilize, that does not accelerate from here. You know, if the labor market does not improve with confidence so weak, then I doubt to see two speed economy, the stronger parts of the economy will stay robust. But obviously, obviously, you know, the economy is so diverse, there are still some very robust growth opportunities like leaves and alternative energy that do have bright spots. But then on the from a macro point of view, the economy obviously needs very aggressive policy help. Right. Ken. I mean, I think there's everything this market has everything for everyone, I guess, is one way to put it. If you're a distressed house, I mean, take your pick, right? There's a ton of value out there. I guess the markets assume that officials have the toolkit and they've come in on time with that toolkit to avert worst case scenarios, industry wide credit events, hard landing scenarios. Can we still look at those big things as tail risks in one? I still think it's possible, but obviously now the market is not pricing for that kind of outlook. Right now, the market is down every day. Some of the developers obviously are trading at very depressed levels. So the market is not pricing for that. But now on the other hand, we see, you know, the state council, even the party, they come out with new policies almost on a daily basis. You mentioned that they just announced new policies to attract foreign businesses during the weekend. So obviously they know what's happening here. They are trying to act. But then I think the economy has to lay the problems have two layers. One is insufficient demand. So then, you know, you may you shouldn't look from government point of view. It should ease your more aggressive fiscal and monetary policies to stabilize aggregate demand. On the other hand, you have a deeper layer of the problem, which is very weak business confidence. You know, the policy flip flop Beijing has done in the past couple of years has really hurts confidence. So I think that's a key problem.

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