Beijing, November 13 – Jenny Gao, Managing Partner of Mandarin Capital Partners, interviewed by AgiChina
While the latest figures of the Chinese economy raise concern for the prolonged slowdown of the national economy, China imagines its future through the goals that the political leaders have set last month for the new five-year plan that will cover the years between 2016 and 2020.
“Green” growth with particular attention to the social angle, and a slower speed compared to the present rates, but still enviable compared to growth rates of many Western countries. Even a 6% growth rate could work for the future development of the country, says in an interview with AgiChina, Jenny Gao, managing partner of Mandarin Capital Partners. “I think that the proposals are good – states – but we still have to see the details of the reforms that will be launched in March after the National Assembly”.
Meanwhile, the Chinese slowdown will be among the major sources of concern for the leaders who will be present at the G20 in Turkey. China is called to reassure its interlocutors about the state of health of its economy, as last September has done the first Minister Li Keqiang, at the opening of the forum of Dalian dedicated to New Champions of the international scene, in its first public appearance after the turmoil in the stock markets last August. On the event Jenny Gao states that it “will be an important topic of the discussion”, but the reading of the statistical data rather than the reading of the percentages may detect an outcome not so dramatic.
How much are the markets worried about the Chinese slowdown after the diffusion of the last data provided by the National Bureau of Statistics? Which is the greater risk for the world economy caused by Beijing?
The Chinese slowdown takes place especially within the industrial sector, while the service sector is still growing. Moreover, it seems that there aren’t big issues on the employment level. The data related to imports should be analyzed taking into account the price of raw materials, the energy price (the fall in the price of crude oil, for example) and the reduction of the real quantity. At the moment it seems that the price factor has greater weight. The inflation level equal to 1.3 % means that there is still room to intervene through the monetary policy. Thus, it is anticipated that the central bank could take further actions. The weak manufacturing means that there is less need for capital goods and this may not be a good thing, in particular for Europe that sells mostly capital goods to China.
Next Sunday, world leaders will meet in Turkey for the G20. How important will be on the agenda of the meeting the topic about the health status of the Chinese economy?
I think it will be an important topic to be discussed.
According to You, will the new proposals of the Fifth Plenum be able to bear the Chinese growth for the next five years, or the new objective of 6.5 % is unrealistic?
I believe that a 6% growth rate can safeguard the Chinese economy, taking into consideration the demographic change and the ultimate goal of reaching the target on income by 2020. I think that the proposals are good, but we still have to check the details of the reforms that will be launched in March after the National Assembly.
In the next few weeks, the International Monetary Fund will have to decide whether to include the Renminbi in the Special Drawing Rights’ basket. What are the consequences that You expect from the internationalization of the Chinese currency?
The internationalisation of the Renminbi is good both for China and for all countries that have a strong economic relationship with China. The outflow of capital from China to other countries may continue to increase, and many other countries could have the Renminbi among their reserve currencies in the future.
The interview was already published in italian language on AgiChina