China Perspectives

Harry Hu, Senior Director at Fitch Ratings, discusses China's recent efforts to manage LGFV risks, including LGFV reclassification and debt substitution plans, along with local government debt trends.(00:00) - Introduction (01:30) - LGFV Debt Control Measures (03:07) - LGFV Reclassification (04:59) - LGFV Debt Substitution Plan (06:55) - Outlook for Special Purpose Bonds (09:34) - Local Government Interest Burdens (11:14) - Conclusion

Laura Zhai, Senior Director at Fitch Ratings, discusses the impact of US tariff hikes on China's commodity sectors.(00:00) - Introduction (00:41) - Impact on aluminum and copper (04:43) - Impact on steel (07:33) - Impact on chemicals (10:28) - China's energy import cost

Amid rapidly changing US trade policies, Fitch analysts, Alex Muscatelli and Janice Chong, discuss the macroeconomic and corporate level impacts on China from rising US tariffs.(00:00) - Introduction (02:10) - Fitch's Tariff Baseline (04:30) - Modeling the Economic Impact of Tariffs (07:12) - China's Trade Diversification (08:55) - Tariffs and China's Economic Outlook (11:01) - Corporate Sector Tariff Exposures (13:30) - Mexico Tariffs and Chinese Corporates (14:55) - Steel, Aluminum and Auto Tariffs (16:48) - Corporate Tariff Risk Management (17:39) - Impact on Shifting Supply Chains (18:45) - Conclusion

A fireside chat on Fitch's 2025 credit outlook for China's sovereign, corporate, local government and banking sectors with Jeremy Zook, Ying Wang, Samuel Kwok and Grace Wu.(00:00) - Introduction (00:47) - Macro and Sovereign Outlook (03:33) - Impact of US Tariffs on China Corporates (04:55) - Property sector outlook (05:53) - Impact of Policy Simulus on Corporates (07:10) - Local Government Finance Outlook (08:36) - Hidden Debt Substitution Policy (10:40) - LGFV Sector Risks (12:40) - Impact of Rate Cuts on Banks (15:24) - Asset Quality Outlook (17:21) - Conclusion

Jinny Yan, Chief China Economist at ICBC Standard Bank, discusses her outlook for China's economy in 2025 and the government's policy measures and priorities, particularly its focus on de-risking, diversifying and enhancing domestic capacity.(00:00) - Introduction (01:01) - Key Issues to Watch in 2025 (02:32) - US/China Trade War Prospects (06:29) - Assessing China's Resilience to Trade Tensions (11:12) - Property Sector (17:11) - Inflation/Deflation Outlook (20:13) - Monetary Policy Response (23:57) - Fiscal Policy Response (28:27) - Government Bond Market Drivers (33:39) - Conclusion

Jing Yang, Director of Fitch Ratings, discusses key credit trends of China's solar PV manufacturing industry.  (00:00) - Introduction (00:46) - Current state of the industry and reason for oversupply (04:37) - Stage of market re-balancing (08:00) - Effectiveness of government response (13:02) - Impact of Trump 2.0 tariff hikes

David Wang, Professor at the Virginia Tech Dept. of Economics and former Credit Suisse Head of APAC (ex-Japan)Economics, joins us to discuss deflationary risks in the Chinese economy and whether the recent policy stimulus can address these pressures.(00:00) - Introduction (01:31) - China's Economic Prospects (05:10) - Drivers of deflationary pressures (08:37) - Expectations for household confidence (11:11) - New productive forces and labour productivity (15:46) - Assessment of Recent Policy Actions (17:37) - Fiscal Support and Consumption Policies (26:16) - Risks of a deflationary spiral (29:09) - High Leverage and deflation (32:12) - Outro

Elaine Xu, Director in Fitch's Financial Institutions team, provides an update on how Chinese banks are managing the challenges from economic headwinds, the property correction, and LGFV debt renegotiations.(00:00) - Introduction (01:38) - Recent trends in bank performance (05:06) - Property sector stress impact on banks (07:26) - Banks role in property policy response (09:26) - LGFV exposures and debt renegotiations (11:16) - Impact of LGFV debt renegotiations (13:01) - Risks for small regional banks (14:33) - Banks increased policy role and its impact (15:40) - Conclusion

Samuel Kwok, Head of Fitch's APAC International Public Finance shares his views on China's local government and LGFV debt problem.(01:21) - 1H24 local governments' fiscal trends (04:02) - Expect marginal improvement in 2H24 (05:30) - Effect of measures to de-risk twelve “high-risk” provinces (08:22) - LGFVs' onshore bond yields at record low (11:28) - Introduction of top three credit themes (12:25) - Potential impact of reform measures pledged by Third Plenum (14:21) - The second credit theme on social housing investment (15:17) - The third credit theme on LGFV debt restrictions (16:32) - Maintain a neutral credit outlook

Shuncheng Zhang, Associate Director of Fitch's China Corporates Team based in Shanghai, shares China's housing demand forecast from 2024 to 2040.(00:00) - Introduction (01:05) - 2024-2040 Housing Demand (03:43) - New Private Home Supply (06:08) - Overview of Forecast Model (09:13) - Factors Leading to Demand Plunge (12:47) - Public and Secondary Housing Supply (13:58) - Fitch's Forecast vs. Others'

Lan Wang, Senior Director in Fitch's Credit Policy Group, joins for a wide-ranging discussion on China credit developments, including recent rating actions, growth prospects, property and banking sector outlooks, and recent EU tariffs on Chinese EVs.(00:00) - Introduction (00:55) - China Sovereign Rating Action (01:48) - Rating actions in other Chinese entities (04:40) - 2024 Macro Outlook for China (06:12) - Property Sector Prospects (08:42) - Banking Sector Outlook (10:58) - EU tariffs on Chinese EVs

Henry Hao, Principal Economist at CRU, discusses structural shifts of China's role in the global commodity market.

Wei Yu, Director of Fitch Ratings, discusses key credit trends of China's coal mining industry.(00:00) - Introduction (00:34) - View on coal prices (02:00) - Debt reduction (03:21) - Financial burden and structural challenges (06:10) - Financing conditions (07:23) - Energy transition risks

Dr. Deborah Elms, Head of Trade Policy at the Hinrich Foundation, discusses China-ASEAN trade ties focusing on key policy issues, supply chain diversification trends, and the outlook for the trade relationship amid rising geopolitical risks.(00:00) - Introduction (04:43) - China-ASEAN Trade Trends (07:02) - Impact of RCEP (09:34) - Trade Policy Outlook (13:50) - China's View of ASEAN Trade Relationship (16:26) - China's Bilateral Surplus with ASEAN (19:43) - Shifting Supply Chains and Navigating US-China Trade Tensions (24:17) - How is China Protecting its ASEAN Trade Relationship from US-China Trade Tensions?

Katie Chen, Senior Director of Fitch Ratings, discusses key credit trends of China's Big Four national asset management companies.  (00:00) - Introduction (01:30) - National AMCs' evolving risks (04:35) - 2024 sector credit outlook (06:49) - Government support stance (10:08) - Differentiation in government export (11:37) - National AMCs' policy role (14:06) - Change of ownership (16:44) - Rating action plan

Jeremy Zook and Ying Wang, co-hosts of China Perspectives podcast, hold a fireside chat about China's 2024 credit outlook. (00:00) - Introduction (00:45) - 2024 macro view (02:53) - Property sector outlook (04:29) - Policy response (07:17) - Infrastructure investment growth (08:41) - Sovereign rating pressure (11:10) - LGFV sector outlook (13:31) - Corporate sector outlook (16:21) - Banking sector outlook (19:11) - Key things to watch out for

Flora Zhu, Director in Fitch's Corporate Research team in Beijing discusses shifting FDI and trade patterns by Chinese corporates in the context of global supply chain diversification.(00:00) - Introduction (01:49) - Drivers of Outbound FDI (03:48) - Key FDI Destinations (06:04) - Sectors Driving Outbound FDI (08:39) - Outlook for Outbound FDI (10:29) - China's Shifting Trade Patterns (12:53) - Intermediate Goods Exports (14:36) - Outlook for Chinese Firms' Role in Global Supply Chains (16:52) - Geopolitical Risks (20:09) - Rating Implications for Chinese Corporates (22:25) - Conclusion

Tyran Kam, Senior Director and Head of Fitch's China Property team based in Hong Kong, shares outlook on the Chinese property market. (00:00) - Introduction (00:47) - Current market state (04:04) - Comparison of China's and Japan's property markets (08:24) - Further policy move (09:26) - Who are the surviving developers (12:15) - Private developers' financing access (13:50) - Defaulted developers' debt restructuring

Jingwei Jia, Associate Director at Sustainable Fitch, discusses the latest developments in China's rapidly evolving onshore green bond market and the impact of the EU's Carbon Border Adjustment Mechanism on China's national carbon market.(00:00) - Introduction (01:42) - Overview of Sustainable Fitch (02:53) - Developments in China's Green Bond Market (07:33) - Green Bond Market Performance and the “Greenium” (09:26) - Key Investor Concerns for Green Bonds (12:54) - China's Carbon Market after the EU Carbon Border Adjustment Mechanism (17:07) - Other Domestic Carbon Market Developments (20:27) - Conclusion

Jeremy Zook, Fitch Ratings' lead sovereign analyst for China, is joining China Perspectives as a co-host. Prior to this role, he was the lead analyst for several countries in APAC. Jeremy's first show is coming up soon. Stay tuned.

Charles Zhang, Director of Fitch's China industrial corporates team, shares his insights on the risks and opportunities for Chinese construction companies amid the country's economic slowdown, including structural challenges and transition plans.(00:00) - Introduction (01:05) - Credit outlook on China's construction sector (06:21) - Growth opportunities from infrastructure projects (09:39) - Construction companies' transition strategy (13:00) - Long-term structural challenges (18:34) - Overseas opportunities (23:35) - Closing

Jing Yang, Director of Fitch's China Research Initiatives based in Shanghai, shares insight on China's booming electric vehicles industry and Chinese automakers' overseas diversification trends.  (00:00) - Introduction (01:18) - Growth drivers of China's EV Market (05:45) - EV price wars (07:59) - Chinese EV brands' competitive edge (09:53) - Can foreign and JV brands catch up? (11:02) - Evolving competitive landscape (14:00) - China's EV exports (16:10) - Risks of Chinese automakers' overseas strategy

James MacDonald, Senior Director and Head of China Research at Savills based in Shanghai, shares first-hand experience and observations on the country's residential, commercial, and industrial real estate markets. Through his professional lens as an 18-year industry veteran, James discusses the key structural changes in China's real estate market and the broader economy. (00:00) - Introduction (02:00) - China's residential market condition (03:27) - Policy direction and stimuluses (07:15) - China's commercial property market condition (10:42) - Oversupply risk in commercial property (14:00) - Investment trends in the office market (16:22) - Multinational companies' China strategy shift (20:36) - China's consumer market outlook (23:01) - “New Economy” real estate assets (25:48) - Growth potential for C-REITs (30:20) - Closing Remarks

Alvin Cheng, Head of Fixed Income, Portfolio Manager at Fidelity International's China WOFE, shares his views on China's economic prospects in 2023 as well as risks and opportunities in the world's second largest bond market. (00:00) - Introduction (01:38) - China's macroeconomic outlook and key investment themes in 2023 (04:05) - Potential risks to China's recovery (06:09) - Deflation and inflation risks (09:25) - China's bond market opportunities for foreign asset managers (14:55) - Challenges for increasing credit exposure (19:18) - Improvement in credit risk pricing (21:49) - Market inefficiencies and structural challenges (23:34) - Fidelity's approach to investing in LGFVs (27:48) - Corporate credit risk in 2023 (29:55) - Closing remarks

Jenny Huang, Deputy Head of China Research Initiatives at Fitch Ratings, shares her views on China's consumption recovery prospects, including stimulus for growth, constraints, consumer behaviour changes, and implications for related companies.(00:00) - Introduction (01:15) - China's consumption recovery prospects (06:45) - Wage inflation risk (08:34) - Sub-segments' performance (14:11) - Changing consumer behaviour (16:52) - E-tailing sector's competitive landscape (20:35) - Consumption-led import demand

Gene Ma, Head of China Research at the Institute of International Finance, shares his views on China's 2023 macro outlook, including prospects for growth, consumption, inflation, and the top priorities for economic policymakers this year.

Dominik Peschel, head of the Economics Unit at the Asian Development Bank's Resident Mission in Beijing, discusses the bank's recent working paper on China's long-term growth prospects and their suggested reforms to increase potential growth.

Colin Mansfield, Sector Head for US Gaming, Lodging & Leisure at Fitch Ratings, positions Macao's elusive gaming recovery within a broader global industry backdrop, and sheds light on the recent tenders for Macao's new gaming concessions.

Dan Wang, chief economist at Hang Seng Bank China, gives her latest views on the Chinese economy, with a focus on the property and labour markets, as well as the ongoing macro spillovers from the “zero Covid” policy.

Jenny Huang, a senior director leading Fitch Ratings' China corporate research team, discusses the key motivations and methods the Chinese authorities employ to support companies in financial distress, drawing from recent case studies.

Long Chen, co-founder and partner at Plenum, weighs in on the “dynamic zero Covid” debate and shares his views on how the Omicron outbreak and global spillovers from the war in Ukraine are impacting China's economy and policy outlook.

Tara Joseph, President of the American Chamber of Commerce in Hong Kong, shares some parting reflections on Hong Kong's evolving business climate, rule of law, Sino-US tensions, and the future of the territory as a global financial hub.

Adrian Cheng, Fitch Ratings' Co-Head of Greater China Property, shares his latest thoughts on China's residential sales and construction trends, and highlights the continued funding and liquidity challenges faced by the nation's developers.

The Honourable Paul Chan Mo-po, Financial Secretary of the Hong Kong Special Administrative Region discusses fiscal policy, housing, geopolitics, and his near-term outlook for the economy and cross-border travel amid a recent omicron outbreak.

Grace Wu, Fitch's Head of Greater China Banks, discusses the impact of China's ongoing property sector stress on the financial system, and gives her top-down view on how the balance of financial risks stands today compared with several years ago.

Jonathan Anderson, co-founder of Emerging Advisors Group, discusses the importance of the property sector to China's economy, whether the nation is facing a property “bubble”, and potential lessons from the ongoing China Evergrande saga.

Charles Li, former Chief Executive of HKEX, discusses the importance of SMEs to China's economy, how to enhance their access to financing, and the nation's evolving regulatory environment in the context of his new venture, Micro Connect.

Julien Martin, General Manager for Bond Connect, offers insights into China's onshore bond market trends, the trajectory of capital market reforms, and the origins and key innovations behind the Bond Connect scheme.

Sebastian Eckardt, the World Bank's Lead Economist for China, Mongolia, and Korea, discusses the bank's latest China Economic Update, with insights into the growth and inflation outlook, financial risks, income inequality, and poverty alleviation.

In our second episode, Mervyn Tang, Fitch's Global Head of ESG Research, discusses electric vehicles, the new national emission trading scheme, and the potential credit implications of China's evolving environmental policy landscape.

In the inaugural episode, Ying Wang, Head of Fitch's APAC Energy & Utilities Group and Fitch's China Research Initiative, discusses China's onshore bond market, the latest wave of SOE defaults, and what to expect in 2021 and beyond.

Join Ying Wang, Fitch's Head of China Research Initiative and APAC Energy & Utilities Group, on China Perspectives, when she speaks to experts both within and outside of Fitch Ratings on the latest credit market and economic developments from China.