China Econ Talk: HSBC official: 2019 is a difficult year for China

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Europe

04:33

Now for our Econ Talk series, in which the chief economists of banks and institutes comment on the state of the Chinese economy. Our reporter Joel Flynn recently sat down with Frederic Neumann, Co-Head of Asian Economics Research, at HSBC. Neumann said that China is facing a number of challenges and the world will feel the effects if the country's development slows.

JOEL FLYNN HONG KONG "You use fairly soft language there, was it not concerning to you what was happening to China over the last year?"

"Is that how you would characterise your expectations for Q2 then? That we're starting to see things at the margin that are going some way towards fixing the underlying issues in China?"

"So what are the biggest risks going forward from Q2 then, accepting that there are clearly structural issues in terms of policy decisions to make."

"Retail investors here still very reactive to headline data. Do we put too much currency in GDP as a measurement?"

"GDP is tricky – it's still a good guide to where we are. Relative change is good as opposed to absolute measure, giving a sense of direction. Easy to follow. Not the only measure – high-frequency numbers like exports, like IP, like retail, like PMI – they matter quite a bit as well. GDP is one among many, probably less important than some of the monthly data we're getting."