Welcome to Fear and Greed, Summer Investing series brought to you by Vanta, specialists in compliance led growth. I'm sean almer. Investors looking to diversify their portfolios may well be looking to global markets, so where does China fit into this? As always, this is general information only and you should seek independent advice before making investment decisions. William lu Is a senior investment analyst at Wilson Asset Management. William, welcome back to Fear and Greed.

Welcome to Fear and Greed, Summer Investing series brought to you by Vanta, specialists in compliance led growth. I'm sean almer. Investors looking to diversify their portfolios may well be looking to global markets, so where does China fit into this? As always, this is general information only and you should seek independent advice before making investment decisions. William lu Is a senior investment analyst at Wilson Asset Management. William, welcome back to Fear and Greed.

They sell.

They sell.

You've been in China recently. I remember when we spoke last year. At one point you were about to head over there. What's your overall impression of the Chinese economy at the moment.

You've been in China recently. I remember when we spoke last year. At one point you were about to head over there. What's your overall impression of the Chinese economy at the moment.

Yes, Chinese economy continues to remain weak. As you said us in China in November, and the sense underground is some of the most recurring conversations I had with assumption downgrade. Clearly people were watching what they were spending on being prioritizing what their wallets are going towards. So despite some of the announcements that we've seen towards end of the year of COORDINATID fiscal stimulus, we think that's largely going to be a twenty twenty five story. The government signaled more public borrowing and more focus on policy to focus on consumption, but we yet to really see the signs of that. So feedback on the ground was that we saw it. We saw a continuation of the macroeconomic conditions. We saw a little bit of bump during Golden Week in October as consumers had a little bit of hope that maybe uti fiscal stimulus measures could work and they had some coupons on like goods, et cetera. But it continues to be weak and that's evidence in some of the more recent data with this. Retail sales growth is only grade three percent year a year in November, which is other than a five percent expected. And then at the same time, industrial production is doing okay, like that's growing roughly just above five percent year on years. So it's leading to a little bit of overcapacity issue, which isn't helping. With the US China tariffs that it potentially ended up horizon as well, Trump talking about blanket sixty percent taris So like, as a team, we have minimal exposure to China, we're closely observing what's happening underground. We still need to see some signs of stabilizing property prices, which we kind of are skying. Because property prices fell at its slowest rate in November. It's still not positive, but arguably less negative. It's bad exactly. We still need to see science of the property market stabilizing. We think China can improve just given its low base, low expectations. We do think there'll be fiscal stimulus measures in twenty thirty five, but we're expecting a modest improvement. We're not really expecting a dramatic acceleration, which I think some investors were hoping for. They when the announcement of physical stimulus measures came up.

Yes, Chinese economy continues to remain weak. As you said us in China in November, and the sense underground is some of the most recurring conversations I had with assumption downgrade. Clearly people were watching what they were spending on being prioritizing what their wallets are going towards. So despite some of the announcements that we've seen towards end of the year of COORDINATID fiscal stimulus, we think that's largely going to be a twenty twenty five story. The government signaled more public borrowing and more focus on policy to focus on consumption, but we yet to really see the signs of that. So feedback on the ground was that we saw it. We saw a continuation of the macroeconomic conditions. We saw a little bit of bump during Golden Week in October as consumers had a little bit of hope that maybe uti fiscal stimulus measures could work and they had some coupons on like goods, et cetera. But it continues to be weak and that's evidence in some of the more recent data with this. Retail sales growth is only grade three percent year a year in November, which is other than a five percent expected. And then at the same time, industrial production is doing okay, like that's growing roughly just above five percent year on years. So it's leading to a little bit of overcapacity issue, which isn't helping. With the US China tariffs that it potentially ended up horizon as well, Trump talking about blanket sixty percent taris So like, as a team, we have minimal exposure to China, we're closely observing what's happening underground. We still need to see some signs of stabilizing property prices, which we kind of are skying. Because property prices fell at its slowest rate in November. It's still not positive, but arguably less negative. It's bad exactly. We still need to see science of the property market stabilizing. We think China can improve just given its low base, low expectations. We do think there'll be fiscal stimulus measures in twenty thirty five, but we're expecting a modest improvement. We're not really expecting a dramatic acceleration, which I think some investors were hoping for. They when the announcement of physical stimulus measures came up.

So if you're in Australian that wants to invest in China, if for no other reason then DIVERSI diversification, How should you think about getting into China at the moment.

So if you're in Australian that wants to invest in China, if for no other reason then DIVERSI diversification, How should you think about getting into China at the moment.

Yeah, it's a really good question. You can buy shares like HH shares in Hong Kong as a direct way. The other way, like the way we've been looking at China is a lot of Western brands have Chinese exposure as well. So a company say Nike, which we don't own, but a portion of their revenues come from China. So there's there's multiple ways to play it, weather from directly investing in Chinese secutives but also in Western companies which might have Chinese revenue exposure.

Yeah, it's a really good question. You can buy shares like HH shares in Hong Kong as a direct way. The other way, like the way we've been looking at China is a lot of Western brands have Chinese exposure as well. So a company say Nike, which we don't own, but a portion of their revenues come from China. So there's there's multiple ways to play it, weather from directly investing in Chinese secutives but also in Western companies which might have Chinese revenue exposure.

What's your big fear about China? Then? So if I decide I'm going to buy Nike, I'm going to buy a BHP out of Australia. That makes an easy one, But I mean, what what is the fear? Is it that China actually the growth rate doesn't pick up like we hope it will.

What's your big fear about China? Then? So if I decide I'm going to buy Nike, I'm going to buy a BHP out of Australia. That makes an easy one, But I mean, what what is the fear? Is it that China actually the growth rate doesn't pick up like we hope it will.

Yeah, I think the fear is like the playbook in China's changed. So before you could buy BHPN rio on iron ore exposure because China would stimulate they will try and reflate property prices, invest in infrastructure, so the iron ore minors and the coupodities with big beneficiaries. This time it feels a little bit different because they're trying to deflate the property bubble, and so we think the winner is coming on the other side will probably be consumption based companies. But then also the market environments changed. So Western brands previously enjoyed halo effects in China, so Starbucks, McDonald's, Nike, they were seen as amazing brands really high quality, but the Chinese competition has largely caught up, so I was really surprised at the amount of innovation there. And there's a real value proposition. So maybe they're not as good as the top tier performing products, but they understand the local market. They've got the manufacturing local for local, and they're selling it at affordable price. So Chinese consumers are in an environment where consumers are becoming increasingly savvy. We're signing to see some of those local Chinese brands do do quite well.

Yeah, I think the fear is like the playbook in China's changed. So before you could buy BHPN rio on iron ore exposure because China would stimulate they will try and reflate property prices, invest in infrastructure, so the iron ore minors and the coupodities with big beneficiaries. This time it feels a little bit different because they're trying to deflate the property bubble, and so we think the winner is coming on the other side will probably be consumption based companies. But then also the market environments changed. So Western brands previously enjoyed halo effects in China, so Starbucks, McDonald's, Nike, they were seen as amazing brands really high quality, but the Chinese competition has largely caught up, so I was really surprised at the amount of innovation there. And there's a real value proposition. So maybe they're not as good as the top tier performing products, but they understand the local market. They've got the manufacturing local for local, and they're selling it at affordable price. So Chinese consumers are in an environment where consumers are becoming increasingly savvy. We're signing to see some of those local Chinese brands do do quite well.

Actually interesting, William, thank you for your time.

Actually interesting, William, thank you for your time.

Thanks Sean.

Thanks Sean.

That was William Luis and your investment analyst at Wayne Global. Remember to get your own independent advice before making investment decisions. This is Fair and Greed Summer Investing series brought to you by vant Van to automates compliance for frameworks like ISO twenty seven, one two, CPS two, three, four and essentially eight saving time and money while building trust. Join over eight thousand companies like Atlasian, Dovetail and fire Ant managing real time risk. Get one thousand dollars off at vanton dot com. Slash Fear and Greed. I'm Sean Almer. Enjoy your day,

That was William Luis and your investment analyst at Wayne Global. Remember to get your own independent advice before making investment decisions. This is Fair and Greed Summer Investing series brought to you by vant Van to automates compliance for frameworks like ISO twenty seven, one two, CPS two, three, four and essentially eight saving time and money while building trust. Join over eight thousand companies like Atlasian, Dovetail and fire Ant managing real time risk. Get one thousand dollars off at vanton dot com. Slash Fear and Greed. I'm Sean Almer. Enjoy your day,