China’s growth is slowing but its economy will still expand by US$1 trillion a year, ANZ Bank chief economist for Greater China, Raymond Yeung, says.
That expansion well exceeds the combination of ASEAN countries and India.
The slowdown of New Zealand exports to China is a cyclical pattern, not structural, and NZ is not being treated any differently to the rest of the world.
“China continues to stick to an open trade policy instead of protectionism,” Yeung told the annual China Business Summit in Auckland. “Its trade policy is pragmatic, strategic and commercial.”
NZ will benefit from this commitment to free trade and its products are a perfect match for China’s food security policy.
Yeung spoke a few hours before the official release of the GDP data for the second quarter of 2023, which was 6.3% compared with the first quarter’s 4.5%.
But the consumer price index is zero and China is one of the few countries in the world that does not have an inflation problem.
For historical reasons, older Chinese people save aggressively and pay down their mortgages to provide security for their children.
Household deposits equal three years of consumption.
Yeung highlighted the high youth unemployment rate as a result of a transition from low quality assembly jobs to higher-skilled workforce requirements.
An example is China’s production of electric vehicles, which now account for 70% of all vehicles made, up from only 10% five years ago.
Until that youth employment improves, Yeung does not expect consumption to grow strongly.