00:00So then, let's explore this in a bit more detail with Shia-Lin Chen.
00:03She's the head of international at Crane Shares.
00:06Shia-Lin, as always, good to have you on the program.
00:08So semiconductor exports, high-tech exports, all of these rose by double digits.
00:12But can that momentum be sustained?
00:15Because we're seeing a lot of jitters, a lot of concerns about the AI boom continuing.
00:20Thank you for having me on your program.
00:22I think the underlying momentum can continue,
00:24but we should distinguish between the sustained growth and sustaining today's exceptional growth rate.
00:31China's semiconductor exports more than doubled in value in October compared with a year earlier.
00:36That is a very strong result, but it would be a bit unrealistic to assume that pace continues indefinitely.
00:43And exports value reflect, of course, price as well as quantity of the goods shipped.
00:48The encouraging point is that China's role in the AI supply chain
00:51extends beyond chips to servers, networking equipment, and other data-centering infrastructures.
00:57So this is a broader manufacturing opportunity, not simply just a story about one product.
01:03But the risk you mentioned is real.
01:05If U.S. or other data centers, investments, so on and so forth, slows,
01:09Chinese suppliers will feel that through a bit weaker orders of pressing pressure.
01:13But strong manufacturing capabilities, obviously, will help the economic momentum for now.
01:18The constructive response is to diversify your customer from China's perspective
01:23and keep improving your product quality and build stronger demand at home.
01:27Indeed, and we are sort of seeing those jitters coming through in SoftBank's results.
01:31We'll cover those a little later.
01:32But I want to get to the U.S.-China trade surplus, because there's a surplus here of $260 billion.
01:37How will that then influence talks on trade policy
01:40if the heads of state from the U.S. and China do meet at the APEC summit?
01:45I think the surplus will definitely add some pressures to the talk,
01:49but it can also make the case for a practical agreement.
01:52We should be precise about the number.
01:54China's surplus with the United States was approximately $266 billion in the first 10 months,
02:00according to Chinese customer figures.
02:02That is a difference, you know, from the entire trillion-dollar surplus with the whole world.
02:07So for Washington, the bilateral gap is likely to reinforce demand
02:11for greater access or greater market access and more purchases of American goods.
02:16For Beijing, the opportunity is to turn those concerns into discussion about expanding two-way trade
02:22rather than simply restricting Chinese exports.
02:24There's already something to build on.
02:26You know, the two countries have extended their trade trues.
02:30For two months, China linked additional repurchases of American agriculture staff.
02:34A constructive outcome could be a very clear trade or a very clear tariff commitment,
02:41commercial viable purchases and more predictable conditions for both businesses on both sides.
02:47Right.
02:48So the domestic economy, of course, is still struggling with weak consumer demand.
02:52Right.
02:52And deflation is also an ongoing problem.
02:54The property sector, we've seen that contracting by around 4% between January and September.
02:59The export data that we've just been speaking about, that looks good.
03:03But does it also represent a concentration risk for China's economic growth?
03:08That's a great question.
03:10There could be a concentration risk if external demand is being asked to do too much of the work for
03:16the economy.
03:16But I would describe the strong exports as a cushion for the economy.
03:20There is, however, the encouraging developments in the latest number,
03:23like you rightly pointed out, is imports grow faster than exports in October,
03:29and the monthly trade surplus narrowed.
03:31This is a positive sign for two-way trade.
03:33Of course, some of that's important.
03:35Our import growth reflects some technology-related demands.
03:38So it's not yet a completely, fully broad consumer recovery.
03:42But the constructive policy priority is to use the breathing space from exports
03:48to strengthen the domestic economy, support the completion of homes,
03:52and also improve household confidence and social protections,
03:56and create more opportunity in service and private enterprise.
04:00So in return, it should be building on a stronger second-engine home
04:05so that household spending and competitive manufacturers support the growth together.
04:10Indeed.
04:10Xiaolin Chen, head of international at CrainShares.
