Tidjane Thiam, CEO of Credit Suisse, said that he was having positive expectations about the shift of the Chinese economy to become a consumer-driven economy. He was speaking at the Credit Suisse China Investment Conference which was conducted in Shenzhen this Wednesday and said that the fundamentals that were the driving force behind China’s growth for several years has remained intact.
He said that there has been a shift in the Chinese model, from an export-oriented, manufacturing model to a domestic-based, consumer-oriented economy. He expressed his faith in the sectors of technology and health. China has been involved in a trade dispute with US and the ongoing trade war has resulted in both the companies imposing a large amount of tariffs on goods worth many billions. Amidst the trade tensions, China’s exports have been badly hit by tariffs and there has been a decline in the economy. China’s GDP has suffered a sharp drop since 2018’s first quarter, with the beginning of trade war.
The analysts have however said that the trade tensions were overrated. They said that the flourishing domestic economy of China has contributed more to its growth than exports. Some measures have been unveiled by Beijing over the last few months for boosting consumption which included extension of the retail hours to help improve the night economy of China. Thiam said that the financial sector plays a key role in bringing a transformation to the Chinese economy. He said that they were being rewarded for their belief and their patience in the economy of China. He said that they would continue their investments for a long term for supporting the economy of China.
Beijing said that it wants its financial sector to be opened up for more foreign investments and to allow the foreign firms to compete with the domestic firms. The MCSI Emerging Markets Index had included the Chinese A-shares the previous year. Also the Bloomberg Barclays Index has included the Chinese shares this year. It is thought that these developments will bring in fresh flow of foreign money into the economy of China.