00:00Let's talk to Mark Oswald, the Chief Economist and Global Strategist at ATM ISI.
00:04Always good to have you on Global Business, Mark.
00:07So how much confidence should we take from this latest set of data?
00:14It's reassuring. It suggests that the stimulus measures enacted before this week's measures are getting some traction.
00:23That showed a bubble in the MBS non-manufacturing PMI.
00:30We showed a lot of strong growth in construction, which is reassuring.
00:34That suggests that some of the money, which has been basically behind target in terms of local government spending, is
00:43being spent.
00:44And it's benefiting, I'm sure, the AI-related sector in terms of infrastructure and other projects.
00:51So that's an encouraging sign.
00:56The manufacturing sector continues to be the backbone, above all, boosted by export-related demand.
01:04What's really driving the strength in high-tech?
01:10I think, well, it is basically there is a shortage of pretty much anything one associates with high-tech and,
01:21indeed, energy transition and, to some extent, also defense-related spending across the world.
01:28And China produces a lot of that, either, you know, may not necessarily be the finished goods, but certainly in
01:35terms of raw materials processing and intermediate goods, China is absolutely a key link in that for everybody worldwide.
01:44Domestic demand is improving, but what's it going to take to really see it become a stronger engine of growth?
01:53Well, let's see what sort of relief this actually gives in terms of the inducements for first-time buyers, in
02:03terms of mortgage relief.
02:07You know, really what one needs to see is that the property investment numbers and property sales numbers are basically
02:16being much less negative.
02:18You know, we've seen drops of 15% to 20% now for three years running.
02:24If that starts to improve, then one can take quite a lot of encouragement that this latest round of spending
02:33is improving, and it will also probably spill over into the wage area, which is probably the other key area.
02:41Wages have been either flat or going lower for quite some time.
02:46I think there's also some relief from the latest set of deals related to the U.S.-China trade truce, which
02:57will definitely benefit some people.
02:59I wanted to ask you about that.
03:00I wanted to zoom out and ask you how important the extension of that trade truce is between China and
03:06the United States as we head into the final months of this year.
03:11Well, I think it's definitely, you know, it's important.
03:15Yes, it's disappointing it's only for two months.
03:18On the other hand, it's encouraging that they want to continue to have a dialogue about discussing a bigger deal
03:26rather than resorting to tariff measures and other trade blocking mechanisms, as they have in the past.
03:38So I think the dialogue is the most important part, and that should actually be reassuring, particularly for some of
03:45the hardest hit sectors in China.
03:48I'm thinking of things like furniture and small household goods.
03:54There should be relief in there for them, and they employ a lot of people.
03:59They certainly do.
04:00Mark Oswald, thank you very much indeed.
04:02Mark Oswald, thank you very much indeed.
04:02Mark Oswald, thank you very much indeed.
04:02Mark Oswald, thank you very much for having us.
