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Bloomberg Audio Studios, podcasts, radio news.

This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis along with Doug Krisner. Join us each day for the stories making news and moving markets in the Asia Pacific. You can subscribe to the show anywhere you get your podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.

This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis along with Doug Krisner. Join us each day for the stories making news and moving markets in the Asia Pacific. You can subscribe to the show anywhere you get your podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.

So here in the States, today, we had those US listed shares in JD dot Com rallying by around sixteen percent. Several factors were play, not the least of which a three billion dollar stock buyback plan. JD reported a modest beat on both revenue and profit. And let's take a closer look now with our own Katherine Limb, Bloomberg Intelligence, Senior analyst on Asia, Consumer and Tech, joining us from our studios in Singapore. Catherine, it's always a pleasure. Let's begin on the e commerce side here. What did you hear from JD that would allow the market to believe that this company has really turned a corner.

So here in the States, today, we had those US listed shares in JD dot Com rallying by around sixteen percent. Several factors were play, not the least of which a three billion dollar stock buyback plan. JD reported a modest beat on both revenue and profit. And let's take a closer look now with our own Katherine Limb, Bloomberg Intelligence, Senior analyst on Asia, Consumer and Tech, joining us from our studios in Singapore. Catherine, it's always a pleasure. Let's begin on the e commerce side here. What did you hear from JD that would allow the market to believe that this company has really turned a corner.

Well, you know, the results itself was a little less overwhelming. It's two percent marginal bid as you've actually mentioned earlier itself. I think it was more of a relief that the company is giving back cash to its shareholders via a twenty two percent hiken dividends as well as an extension of their three billion share buyback program. Now just bear in mind that previously they had in place a three billion and now they're going to start another new three billion for the next three years. So not much of a new news coming out from there. But really I think it is a relief that it's probably you know, syncing into the markets, particularly since we've heard so much about the competition and the company is going hits on with Ali Baba.

Well, you know, the results itself was a little less overwhelming. It's two percent marginal bid as you've actually mentioned earlier itself. I think it was more of a relief that the company is giving back cash to its shareholders via a twenty two percent hiken dividends as well as an extension of their three billion share buyback program. Now just bear in mind that previously they had in place a three billion and now they're going to start another new three billion for the next three years. So not much of a new news coming out from there. But really I think it is a relief that it's probably you know, syncing into the markets, particularly since we've heard so much about the competition and the company is going hits on with Ali Baba.

Yeah, the competition is fierce, for sure. The executives did seem pretty confident this year, saying that they could take market leadership. And I see in your comments that both the dividend and the and the and the buyback shows that you don't really have to worry too much about a cash drain. Is that how sustainable? Is that kind of feeling?

Yeah, the competition is fierce, for sure. The executives did seem pretty confident this year, saying that they could take market leadership. And I see in your comments that both the dividend and the and the and the buyback shows that you don't really have to worry too much about a cash drain. Is that how sustainable? Is that kind of feeling?

Well, you know, there are many parts again to JD's dot COM's overall reported numbers, and really if you look at the numbers itself, we had a twelve percent drop in the retail profits. That is the e commerce side of things, and the you know, the bum up really came from the logistics side of the business, which is a good and good to have, particularly since you know, the business, the logistics business will continue to enjoy economies of scale as it actually goes bigger. So you're going to have to actually these two forces coming together, which then I guess what JD dot Com really is, you know, can lean on the logistics business to help offset you know, the profit drag coming from the competition. So net Net I think, you know, they're in a fairly neutral position. I would say, we'll have to see whether they succeed in getting that market share back from Ali Baba and not. Let's not forget PDD and doing.

Well, you know, there are many parts again to JD's dot COM's overall reported numbers, and really if you look at the numbers itself, we had a twelve percent drop in the retail profits. That is the e commerce side of things, and the you know, the bum up really came from the logistics side of the business, which is a good and good to have, particularly since you know, the business, the logistics business will continue to enjoy economies of scale as it actually goes bigger. So you're going to have to actually these two forces coming together, which then I guess what JD dot Com really is, you know, can lean on the logistics business to help offset you know, the profit drag coming from the competition. So net Net I think, you know, they're in a fairly neutral position. I would say, we'll have to see whether they succeed in getting that market share back from Ali Baba and not. Let's not forget PDD and doing.

Yeah Prian grow duo. I mean, so let's talk a little bit about the Chinese consumer because I'm looking at what really drove a lot of the revenue gains electronics and home appliance. Is what does this tell us about the appetite for durable goods in China.

Yeah Prian grow duo. I mean, so let's talk a little bit about the Chinese consumer because I'm looking at what really drove a lot of the revenue gains electronics and home appliance. Is what does this tell us about the appetite for durable goods in China.

Well, you know, electronics and home appliances, that has always been a strong category for JD dot Com. They started off in that business and that had also triggered earlier talks about them, you know, looking to actually acquire Curast in London. So that's that bit of that, and I think, you know for it when it comes to electronics and home appliance, let's not forget that there's a lot of actually there's a lot of price cuttings going on in China right now. With getting seeing a lot of the subsidies, et cetera, it's probably going to be less of you know, there's going to be less of an impact on home appliance given that we're going to step into Women's Day tomorrow. So it's all about the cosmetic frenzy out there, but price cuts, low price affudibility that is likely still got a hole in China for the rest of twenty twenty four.

Well, you know, electronics and home appliances, that has always been a strong category for JD dot Com. They started off in that business and that had also triggered earlier talks about them, you know, looking to actually acquire Curast in London. So that's that bit of that, and I think, you know for it when it comes to electronics and home appliance, let's not forget that there's a lot of actually there's a lot of price cuttings going on in China right now. With getting seeing a lot of the subsidies, et cetera, it's probably going to be less of you know, there's going to be less of an impact on home appliance given that we're going to step into Women's Day tomorrow. So it's all about the cosmetic frenzy out there, but price cuts, low price affudibility that is likely still got a hole in China for the rest of twenty twenty four.

Yeah, part of Doug's question about how healthy is the consumer, they actually did say that they felt that consumption recovery would be further strengthened this year. So that's one company to Doug's question. And if we could sort of put together the earnings from Ali Baba and JD and others, you put it all together, do you feel confident that the consumer will be back this year?

Yeah, part of Doug's question about how healthy is the consumer, they actually did say that they felt that consumption recovery would be further strengthened this year. So that's one company to Doug's question. And if we could sort of put together the earnings from Ali Baba and JD and others, you put it all together, do you feel confident that the consumer will be back this year?

Well, I guess that really depends on your definition of where we are expecting them to go back to. Are we expecting them to do more impulse buying as what we have seen, you know, prior to the COVID, I don't think so, really facing a more rational shoppers and probably more discerning in their spending. With also seen that continued trend that you know, the consumers would like to actually spend more on travel, leisure activities versus you know, your discretionary goods, and you know, particularly you're super high and luxury, they're just not buying as much as they used to before.

Well, I guess that really depends on your definition of where we are expecting them to go back to. Are we expecting them to do more impulse buying as what we have seen, you know, prior to the COVID, I don't think so, really facing a more rational shoppers and probably more discerning in their spending. With also seen that continued trend that you know, the consumers would like to actually spend more on travel, leisure activities versus you know, your discretionary goods, and you know, particularly you're super high and luxury, they're just not buying as much as they used to before.

So, Catherine, you were talking a moment ago about price cuts discounts on electronics and home appliances. I'm thinking that's going to create margin pressure here? Is this something that JD addressed.

So, Catherine, you were talking a moment ago about price cuts discounts on electronics and home appliances. I'm thinking that's going to create margin pressure here? Is this something that JD addressed.

Now that's an interesting point because I think right now in China you're looking at you know, the entire supply chain right now, you know, seeing a surplus of you know, inventories. They are also manufacturers are getting more operating efficiency and in a position to actually lower costs. And what's happening is that you know, some of them are passing their margins and profits through to the consumers. So in a case of JD dot Com. No doubt there is still going to be a drag on down margins, particularly as they tried to actually win back more users from Ali Baba and PDD via incentives and pots that we continue to actually see on their platform.

Now that's an interesting point because I think right now in China you're looking at you know, the entire supply chain right now, you know, seeing a surplus of you know, inventories. They are also manufacturers are getting more operating efficiency and in a position to actually lower costs. And what's happening is that you know, some of them are passing their margins and profits through to the consumers. So in a case of JD dot Com. No doubt there is still going to be a drag on down margins, particularly as they tried to actually win back more users from Ali Baba and PDD via incentives and pots that we continue to actually see on their platform.

Yeah, all right, Catherine, thanks so much. I like that point, Doug, that Catherine made about it depends what consumers go back to, because they were spending really crazily over the past. I think I told you before that when I first came here, the Americans and the Europeans were the rich tourists in Asia. Then in the eighties it became the Japanese for sure, and then after you moved a little bit later on you had the Chinese, and the Chinese were buying up properties with all cash and spending on luxury goods and lined up outside the Louis Vuitton stores like fifty to eighty people in line to get in this store. I don't think we're going back to that well again. One of the featured stories this morning on the Bloomberg Terminal, China is targeting it's one hundred and seventy million migrant workers to help shore up the economy, and part of that has to do with the Houko system joining us now is shule N Bloomberg opinion columnists. The only problem with this, Shulely, is that reforming the Houko system is a little bit about freedom and giving workers and people a little more access to go where they want and to still collect their benefits. Do you believe that this is something that can make a measurable impact on the Chinese economy and can it happen anytime soon?

Yeah, all right, Catherine, thanks so much. I like that point, Doug, that Catherine made about it depends what consumers go back to, because they were spending really crazily over the past. I think I told you before that when I first came here, the Americans and the Europeans were the rich tourists in Asia. Then in the eighties it became the Japanese for sure, and then after you moved a little bit later on you had the Chinese, and the Chinese were buying up properties with all cash and spending on luxury goods and lined up outside the Louis Vuitton stores like fifty to eighty people in line to get in this store. I don't think we're going back to that well again. One of the featured stories this morning on the Bloomberg Terminal, China is targeting it's one hundred and seventy million migrant workers to help shore up the economy, and part of that has to do with the Houko system joining us now is shule N Bloomberg opinion columnists. The only problem with this, Shulely, is that reforming the Houko system is a little bit about freedom and giving workers and people a little more access to go where they want and to still collect their benefits. Do you believe that this is something that can make a measurable impact on the Chinese economy and can it happen anytime soon?

I think the microworkers have had a really really tough time in the last four years, especially during the COVID era, right, and then like allowing them to move around more freely that will help the political stability in the society. I mean, they really had a very tough time.

I think the microworkers have had a really really tough time in the last four years, especially during the COVID era, right, and then like allowing them to move around more freely that will help the political stability in the society. I mean, they really had a very tough time.

So if you're talking about things like access to housing and medical care as well as education resources, this is a long term vision here. I mean, I think the government is trying to target some type of transformation. Am I right on that?

So if you're talking about things like access to housing and medical care as well as education resources, this is a long term vision here. I mean, I think the government is trying to target some type of transformation. Am I right on that?

Yes? And let's keep in mind that the China's micro workers have been going to the cities for like three decades, right, some of them are already hitting their retirement age. Believe it or not, China is getting old. Some of them are in their sixties, and even so they don't have any retirement money because whatever they have earned they have sent back to their villagers to support their children and grandchildren. And again, the last four years have been very tough time. And then everybody in China knows about that, and we read about news articles of interviews of microworkers saying, you know, I'm in my sixties, I'm still working minimum wage. What am I going to do with the future. So this way, it's just a way to help appease the Chinese society and make people feel a little bit better about the government, if that makes sense. And by the way, the Chinese government is also increasing the pension funds for retirees by a slight amount for the farmers, right, you know, this.

Yes? And let's keep in mind that the China's micro workers have been going to the cities for like three decades, right, some of them are already hitting their retirement age. Believe it or not, China is getting old. Some of them are in their sixties, and even so they don't have any retirement money because whatever they have earned they have sent back to their villagers to support their children and grandchildren. And again, the last four years have been very tough time. And then everybody in China knows about that, and we read about news articles of interviews of microworkers saying, you know, I'm in my sixties, I'm still working minimum wage. What am I going to do with the future. So this way, it's just a way to help appease the Chinese society and make people feel a little bit better about the government, if that makes sense. And by the way, the Chinese government is also increasing the pension funds for retirees by a slight amount for the farmers, right, you know, this.

Is the type of thing that actually a lot of critics have been calling for for a long time. It is about freedom though, as I mentioned earlier, it is about giving people more choice in what they do. And when you think about President c Jinping and what his priorities are, it's national security and control and that sort of thing. You wonder if you know they're sort of competing ideologies or efforts.

Is the type of thing that actually a lot of critics have been calling for for a long time. It is about freedom though, as I mentioned earlier, it is about giving people more choice in what they do. And when you think about President c Jinping and what his priorities are, it's national security and control and that sort of thing. You wonder if you know they're sort of competing ideologies or efforts.

No, I don't necessarily see it that way. I mean, like China has built all these infrastructure, right, like, what's the use of all this infrastructure and the returns on the asset if you don't let people move about and the go about it the trends and the UH and the flights, et cetera. So I don't see it that way. And also it helps local governments boost their competitive animal spirit if I may say, uh, you know, the best cities will attract the best labor supply and the and as a result they can sell more land. So allowing migrant workers to move around more freely, it actually helped boost competition across China.

No, I don't necessarily see it that way. I mean, like China has built all these infrastructure, right, like, what's the use of all this infrastructure and the returns on the asset if you don't let people move about and the go about it the trends and the UH and the flights, et cetera. So I don't see it that way. And also it helps local governments boost their competitive animal spirit if I may say, uh, you know, the best cities will attract the best labor supply and the and as a result they can sell more land. So allowing migrant workers to move around more freely, it actually helped boost competition across China.

So to Brian's initial point about the impact that it will have on the overall economy in China, do you have a sense of that, I mean, is it going to be significant in the impact?

So to Brian's initial point about the impact that it will have on the overall economy in China, do you have a sense of that, I mean, is it going to be significant in the impact?

I think it's hard to say. I mean, the services sector is uh is a little bit weak, right, Like the government is spending a lot of money on the higher manufacturing, leaving the services sector behind. So perhaps more freedom of labor movement will boost that naturally without the government spending a lot of money on it.

I think it's hard to say. I mean, the services sector is uh is a little bit weak, right, Like the government is spending a lot of money on the higher manufacturing, leaving the services sector behind. So perhaps more freedom of labor movement will boost that naturally without the government spending a lot of money on it.

And sorry to bring up the Orwellian side of it a couple of times in this interview. But you know, that's what we've been dealing with in China, and I know that you understand that better than even we do.

And sorry to bring up the Orwellian side of it a couple of times in this interview. But you know, that's what we've been dealing with in China, and I know that you understand that better than even we do.

I still think, you know, like the government is quite okay with you know, freedom of movements, right, like a freedom of expression perhaps is censored, but not movements.

I still think, you know, like the government is quite okay with you know, freedom of movements, right, like a freedom of expression perhaps is censored, but not movements.

Yeah, I guess so. Well, it's it is interesting to think about how quickly this can be implemented. We also know that in terms of the individual traveler schemes, for instance, more people are being allowed to travel to Hong Kong. Do you think that that eventually makes a difference for Hong Kong?

Yeah, I guess so. Well, it's it is interesting to think about how quickly this can be implemented. We also know that in terms of the individual traveler schemes, for instance, more people are being allowed to travel to Hong Kong. Do you think that that eventually makes a difference for Hong Kong?

So far it doesn't. And then local news media has reported on that because I mean, like a lot of the city city's residents they cannot really travel to Hong Kong individually, but they have to do it through a tool group, right, But essentially they have been coming to Hong Kong individually anyhow, because the two group will say, okay, let me just design a package with only two people. That's a tour, right. So there has been a roundabout way and this is like not really meaningful.

So far it doesn't. And then local news media has reported on that because I mean, like a lot of the city city's residents they cannot really travel to Hong Kong individually, but they have to do it through a tool group, right, But essentially they have been coming to Hong Kong individually anyhow, because the two group will say, okay, let me just design a package with only two people. That's a tour, right. So there has been a roundabout way and this is like not really meaningful.

To be honest, So let me take the other side of the trade. Surely, what could possibly go wrong with this plan, the.

To be honest, So let me take the other side of the trade. Surely, what could possibly go wrong with this plan, the.

Mainland Chinese government's plan or the Hong Kong.

Mainland Chinese government's plan or the Hong Kong.

Main the mainland plan.

Main the mainland plan.

Well, everyone wants to go to the biggest cities like Shanghai and Beijing, and then these cities will be very crowded and we will see that, you know, the big cities of Shanghai Beijing will say okay, too many of my grown workers will have to kick them out. And we're going to see that again from ten years ago, we had that kind of episodes.

Well, everyone wants to go to the biggest cities like Shanghai and Beijing, and then these cities will be very crowded and we will see that, you know, the big cities of Shanghai Beijing will say okay, too many of my grown workers will have to kick them out. And we're going to see that again from ten years ago, we had that kind of episodes.

Right, surely does does rapid urbanization lead to more pollution in a sense and hurt the fight against climate change?

Right, surely does does rapid urbanization lead to more pollution in a sense and hurt the fight against climate change?

I think.

I think.

In the biggest cities, like I'm from Shanghai, and if you look at the air quality in Shanghai, it's getting much much better. Like the government is doing a fairly good job at the environmental protection. And then let's be honest, the economy is not so great. There are so not so many factories turning out.

In the biggest cities, like I'm from Shanghai, and if you look at the air quality in Shanghai, it's getting much much better. Like the government is doing a fairly good job at the environmental protection. And then let's be honest, the economy is not so great. There are so not so many factories turning out.

Things fairly positive. Shule renn Today love it. Thanks very much Shuley for joining us here on the program. Shuly Ren Bloomberg Opinion colonists with this live let's take a closer look at markets now. Our guest in studios with US in Hong Kong is Ekaterina Biggos, who's Chief investment officer on Core Investments for Asia ex Japan at AXA Investment Managers. Ekaterina, we have lots of time to talk about China. I just wanted to ask you about FED Chief J Powell and the commentary about interest rates. We know he didn't really say all that much. He didn't rock the boat for sure. Everyone knows that the Fed wants to be careful on this front, but that cuts could be coming. I think everyone also knows that the FED funds rate that was in place to deal with inflation at more than eight percent probably isn't the right level now that you have core inflation down under three percent. So I'm not sure what ACCES is projecting. But will we see these cuts coming anytime soon?

Things fairly positive. Shule renn Today love it. Thanks very much Shuley for joining us here on the program. Shuly Ren Bloomberg Opinion colonists with this live let's take a closer look at markets now. Our guest in studios with US in Hong Kong is Ekaterina Biggos, who's Chief investment officer on Core Investments for Asia ex Japan at AXA Investment Managers. Ekaterina, we have lots of time to talk about China. I just wanted to ask you about FED Chief J Powell and the commentary about interest rates. We know he didn't really say all that much. He didn't rock the boat for sure. Everyone knows that the Fed wants to be careful on this front, but that cuts could be coming. I think everyone also knows that the FED funds rate that was in place to deal with inflation at more than eight percent probably isn't the right level now that you have core inflation down under three percent. So I'm not sure what ACCES is projecting. But will we see these cuts coming anytime soon?

Yeah?

Yeah?

And I think the stance that Joonpower has taken it's not a surprise for us. As we drafted our outlook for twenty twenty four and with the rally that was seen in raids into the year end twenty twenty three, we've said that the market is running ahead of itself, so the rallying rates was overdone. So the expectations were the cuts or priced in for as soon as March and certainly more than what the FED dot plot was suggesting, And certainly that was an indication that some market participants thought that the economy US economy still has a risk to potentially enter into recession and slow down. Our view was that the US economy, supported by still strong consumer and with some recovery and investment in twenty twenty four supported by the Cheap and Inflation Reduction Act, is going to stay more resilient twenty twenty four. So our view was from the beginning of the year that the FED will have scope to normalize and get retraded and normalize monitory policy in twenty twenty four to be in line to where the growth is for the US at this stage, instead of cutting rates aggressively, which is more applicable for a slow down growth environment.

And I think the stance that Joonpower has taken it's not a surprise for us. As we drafted our outlook for twenty twenty four and with the rally that was seen in raids into the year end twenty twenty three, we've said that the market is running ahead of itself, so the rallying rates was overdone. So the expectations were the cuts or priced in for as soon as March and certainly more than what the FED dot plot was suggesting, And certainly that was an indication that some market participants thought that the economy US economy still has a risk to potentially enter into recession and slow down. Our view was that the US economy, supported by still strong consumer and with some recovery and investment in twenty twenty four supported by the Cheap and Inflation Reduction Act, is going to stay more resilient twenty twenty four. So our view was from the beginning of the year that the FED will have scope to normalize and get retraded and normalize monitory policy in twenty twenty four to be in line to where the growth is for the US at this stage, instead of cutting rates aggressively, which is more applicable for a slow down growth environment.

Speaking of growth, we've got a target now for the Chinese economy is roughly five percent this year that coming out of the NPC. What's your takeaway with all the other kind of points that we heard in terms of economic policy or ways to stimulate and try to encourage a little bit more demand. Are you confident now that maybe things are at a point where we can say the bottom is in and we're going to see some kind of recovery going forward, or is it just simply too soon to make that call.

Speaking of growth, we've got a target now for the Chinese economy is roughly five percent this year that coming out of the NPC. What's your takeaway with all the other kind of points that we heard in terms of economic policy or ways to stimulate and try to encourage a little bit more demand. Are you confident now that maybe things are at a point where we can say the bottom is in and we're going to see some kind of recovery going forward, or is it just simply too soon to make that call.

Yeah, it is a combination.

Yeah, it is a combination.

Making that call is a bit too soon, But certainly the five percent target, it's a bit ambitious considering that we have less favorable base effects that we had.

Making that call is a bit too soon, But certainly the five percent target, it's a bit ambitious considering that we have less favorable base effects that we had.

In twenty twenty four.

In twenty twenty four.

I mean, clearly the policy makers are choosing gradualism over a kind of speedy measures to support the economy. So we might say the market anticipated or expected to have much more aggressive measures and suddenly disappointed to some degree, particularly the fact that you was a supply centric fiscal stimulus. What does it mean is that investment is still staying in focus to lift and grow the economy for twenty twenty four, and investment is focused on infrastructure, urban ripertalization, and certainly some places like technology development is coming as a top task for twenty and twenty four. Consumption or the measures directed to consumption were there on a periphery, but somewhat disappointing considering that consumption is a way to remove some of the slack in the economy that we're seeing, or they access manufacturing capacity that we see in the economy. So again nothing surprising, somewhat disappointing, and again the measure is ambitious, but it's all now centered around implementation of some of the measures, and certainly down the line whatever they're going to use the monetary policy as a way to support the economy as well.

I mean, clearly the policy makers are choosing gradualism over a kind of speedy measures to support the economy. So we might say the market anticipated or expected to have much more aggressive measures and suddenly disappointed to some degree, particularly the fact that you was a supply centric fiscal stimulus. What does it mean is that investment is still staying in focus to lift and grow the economy for twenty twenty four, and investment is focused on infrastructure, urban ripertalization, and certainly some places like technology development is coming as a top task for twenty and twenty four. Consumption or the measures directed to consumption were there on a periphery, but somewhat disappointing considering that consumption is a way to remove some of the slack in the economy that we're seeing, or they access manufacturing capacity that we see in the economy. So again nothing surprising, somewhat disappointing, and again the measure is ambitious, but it's all now centered around implementation of some of the measures, and certainly down the line whatever they're going to use the monetary policy as a way to support the economy as well.

You do hear a lot from investors. It's a sort of hue and cry that they don't seem to be too concerned about growth, and that the policy makers at the very top, led by Cigenping, are all about self defense now and national security and self reliance and all of that. But that's still something as an investor that you can play. So would your message or should the message be to investors, wake up, this is what they want to do. Just go find something that will benefit as a result.

You do hear a lot from investors. It's a sort of hue and cry that they don't seem to be too concerned about growth, and that the policy makers at the very top, led by Cigenping, are all about self defense now and national security and self reliance and all of that. But that's still something as an investor that you can play. So would your message or should the message be to investors, wake up, this is what they want to do. Just go find something that will benefit as a result.

Yeah, And I think the point we do have to look as often as the investors above kind of the headlines, and we look at the direction of travel and the ambitions for China is certainly to evolve or become more technological advanced. That's important in terms of upgrading the manufacturing and in terms of productivity growth. So the ambitions for China to become a lot more technological advance, I think it's going to support some of the sectors. And I think the focus on that is important and the emphasis that they put into the current package on that, I think it's something to investors need to bear in mind. The other themes that China is, of course paying attention is likely to benefit is energy transition, and energy transition is a scope for China, but also is a scope for developed economies. And China still holds a large percentage of clint tech production, and also it dominates in terms of processing of commodities or rare metals that are part of evs and some of the turbanes, wind turbines. So the point is that we need to look beyond the broader macro store and look at some of the themes that are happening in economy, some of the drivers.

Yeah, And I think the point we do have to look as often as the investors above kind of the headlines, and we look at the direction of travel and the ambitions for China is certainly to evolve or become more technological advanced. That's important in terms of upgrading the manufacturing and in terms of productivity growth. So the ambitions for China to become a lot more technological advance, I think it's going to support some of the sectors. And I think the focus on that is important and the emphasis that they put into the current package on that, I think it's something to investors need to bear in mind. The other themes that China is, of course paying attention is likely to benefit is energy transition, and energy transition is a scope for China, but also is a scope for developed economies. And China still holds a large percentage of clint tech production, and also it dominates in terms of processing of commodities or rare metals that are part of evs and some of the turbanes, wind turbines. So the point is that we need to look beyond the broader macro store and look at some of the themes that are happening in economy, some of the drivers.

But the thing is that's all top down, isn't it. And I think what investors, you know, just to argue against the point I made a few moments ago, is investors, you know, like those those internet and e commerce companies because that was bottom up, that's what people wanted, not what the policy makers wanted.

But the thing is that's all top down, isn't it. And I think what investors, you know, just to argue against the point I made a few moments ago, is investors, you know, like those those internet and e commerce companies because that was bottom up, that's what people wanted, not what the policy makers wanted.

Yeah, and it seems that there is certainly a shift.

Yeah, and it seems that there is certainly a shift.

It's happening, or at least an indication that there's a desire for the shift to happen, putting kind of private institution of private corporations on the same level playing field as the state owned enterprises.

It's happening, or at least an indication that there's a desire for the shift to happen, putting kind of private institution of private corporations on the same level playing field as the state owned enterprises.

So I think the scope.

So I think the scope.

Is there, and the desire seems to be or the messaging seems to be the right message at the moment. Clearly, due to the current macrocom environment, sees are doing better. They're perceived as being a lot more quality, the dividend payouts are much higher, So certainly they're benefiting at the moment. But as we look into the second part of the year with the themes that I talked about, of the drive that I talked about, and with the shift and monetary policy, and you have to account for the fact that China will have a lot more room to move when the FED moves that said, it will provide support to the other growth sectors that existing in China economy.

Is there, and the desire seems to be or the messaging seems to be the right message at the moment. Clearly, due to the current macrocom environment, sees are doing better. They're perceived as being a lot more quality, the dividend payouts are much higher, So certainly they're benefiting at the moment. But as we look into the second part of the year with the themes that I talked about, of the drive that I talked about, and with the shift and monetary policy, and you have to account for the fact that China will have a lot more room to move when the FED moves that said, it will provide support to the other growth sectors that existing in China economy.

So I would say it's two stage process.

So I would say it's two stage process.

But if the focus remains on supply, the risk is in maintaining I would argue maintaining over capacity. You talked about the EV I mean clearly that seems to be a case of a lot of overcapacity, and that has kind of a deflationary implication, which is the other trapped that China's caught in right now.

But if the focus remains on supply, the risk is in maintaining I would argue maintaining over capacity. You talked about the EV I mean clearly that seems to be a case of a lot of overcapacity, and that has kind of a deflationary implication, which is the other trapped that China's caught in right now.

Yeah, and absolutely this is not one point to say that there is no precedent a rule book or an economic rule book of gearshift from where for where China is at the moment and an economic cycle, and certainly in the microeconomic challenges that.

Yeah, and absolutely this is not one point to say that there is no precedent a rule book or an economic rule book of gearshift from where for where China is at the moment and an economic cycle, and certainly in the microeconomic challenges that.

Are also structural.

Are also structural.

So the overcapacity isn't important, and they've on a periphery addressed it to some degree through the trading programs. But I would expect as we go down the line, there will do a lot more measures to support the consumer. And one part to consider again relating consumer to investment is the consumer confidence is very much related to labor market as related to property market. So efforts to revive the property market and investment to direct it in the property market recovering that will suddenly create the wealth effect and we'll bring the consumer confidence.

So the overcapacity isn't important, and they've on a periphery addressed it to some degree through the trading programs. But I would expect as we go down the line, there will do a lot more measures to support the consumer. And one part to consider again relating consumer to investment is the consumer confidence is very much related to labor market as related to property market. So efforts to revive the property market and investment to direct it in the property market recovering that will suddenly create the wealth effect and we'll bring the consumer confidence.

And will bring jobs. And I think this is important.

And will bring jobs. And I think this is important.

So again we need to look at what is the repercussions of some of those investment measures that China is putting in place.

So again we need to look at what is the repercussions of some of those investment measures that China is putting in place.

Hey, Katerina, thank you so much for joining us here in our studios. We do appreciate it. Katerina Biggos, Chief Investment Officer on Core Investments Asia ex Japan for EXA Investment Managers.

Hey, Katerina, thank you so much for joining us here in our studios. We do appreciate it. Katerina Biggos, Chief Investment Officer on Core Investments Asia ex Japan for EXA Investment Managers.

This has been the Bloomberg Daybreak Asia podcast, bringing you the stories, making news and moving markets in the Asia Pacific. Visit the Bloomberg Podcast channel on YouTube to get more episodes of this and other shows from Bloomberg. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always on bloomberg Berg Radio, the Bloomberg Terminal, and the Bloomberg Business app

This has been the Bloomberg Daybreak Asia podcast, bringing you the stories, making news and moving markets in the Asia Pacific. Visit the Bloomberg Podcast channel on YouTube to get more episodes of this and other shows from Bloomberg. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always on bloomberg Berg Radio, the Bloomberg Terminal, and the Bloomberg Business app