# US Extends Strikes on Iran, China Consumer Inflation Slows

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 9 Jul 2026, 22 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/2dc4cd38-d71b-4544-8929-b4820029666c/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. The US military struck Iran for the second straight day, an escalation of violence that threatens to strain an already fragile ceasefire. The attacks came just hours after President Donald Trump at the NATO summit in Turkey said the US would probably target Iran again. The US launched attacks on Tuesday and revoked a waiver allowing new sales of Iranian oil in response to attacks on ships in the Strait of Hormuz that the administration blamed on the Islamic Republic. Oil extended its gains. We spoke to Stephen Stapczynski, Bloomberg's Asia Energy Team Leader. Plus - China's consumer prices rose slower than expected and factory inflation showed signs of peaking, after a pullback in commodity costs with an easing of tensions over Iran last month. The consumer-price index decelerated to 1% in June from a year earlier, compared with a gain of 1.2% in the previous month, according to data released by the National Bureau of Statistics on Thursday. The median estimate in a Bloomberg survey of economists was 1.1%. Producer inflation accelerated slightly to 4.1% from a year ago, matching forecasts. On a month-on-month basis, factory prices declined 0.3% from May, their first drop since July 2025. Bloomberg TV hosts Haidi Stroud-Watts and Avril Hong spoke to Robin Xing, Chief China Economist at Morgan Stanley. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
[0:10] Speaker 2: Welcome to the Daybreak Asia podcast. I'm deg Krisner. Oil
[0:13] Speaker 2: prices are higher at this hour. This is after US
[0:16] Speaker 2: forces conducted additional strikes against Iran. Central commands said its
[0:21] Speaker 2: aim was to further degrade Iran's ability to threaten freedom
[0:25] Speaker 2: of navigation in the Strait of Hormuz. Now we should
[0:28] Speaker 2: point out that earlier in the day President Trump declared
[0:31] Speaker 2: that tentative cease fire over, and then later in the
[0:34] Speaker 2: day we heard from state linked nere News in Iran
[0:37] Speaker 2: quoting military sources saying a large scale retaliatory operation will
[0:43] Speaker 2: be launched against US military bases in the region in response. Now,
[0:47] Speaker 2: a short while ago, Kuwait's army said its air defense
[0:50] Speaker 2: systems intercepted some hostile targets. For a closer look at
[0:54] Speaker 2: the oil story, let's bring in Bloomberg Stephen Stepchinsky. Stephen
[0:58] Speaker 2: is Asia team leader for our energy coverage and he
[1:01] Speaker 2: joins from our studios in Singapore. Thank you for being here,
[1:04] Speaker 2: And I want to point out before we get into
[1:06] Speaker 2: the conversation that in New York trading WTI crude oil
[1:10] Speaker 2: was up nearly four and a half percent and right
[1:13] Speaker 2: now in Asian trading WTI up about one point three percent.
[1:17] Speaker 2: Are you surprised, Stephen that we're not seeing greater advances
[1:21] Speaker 2: in the oil price at this hour?
[1:23] Speaker 3: You know, I think there is a view that as
[1:26] Speaker 3: long as the oil continues flowing to a degree, then
[1:30] Speaker 3: maybe we're not in the worst case scenario situation. So
[1:34] Speaker 3: let me explain that even though there is an increased intention,
[1:38] Speaker 3: we have noticed that there have been a few oil
[1:40] Speaker 3: tankers kind of getting through in the last twenty four hours,
[1:44] Speaker 3: there hasn't been a total halt to navigation like we've
[1:48] Speaker 3: seen maybe in March or April, the early months of
[1:50] Speaker 3: the war and the conflict in the Middle East. Now,
[1:55] Speaker 3: I think also it's not so much the Trump taco trade.
[1:59] Speaker 3: Trump always chickens out, but it is you know, we've
[2:02] Speaker 3: seen a bit of a tit for tat over the
[2:05] Speaker 3: last few weeks and months, and then still this ceasefire
[2:08] Speaker 3: tends to endure. While Trump did say that the ceasefire
[2:13] Speaker 3: essentially to him, was gone, there is still an expectation
[2:17] Speaker 3: that the US will come back to the negotiating table.
[2:21] Speaker 3: So while this does remain contained between you know, US
[2:25] Speaker 3: military bases and strategic targets on Iran, You're likely going
[2:28] Speaker 3: to see oil continuing this seventy dollars maybe low eighty
[2:31] Speaker 3: dollar range. The real risk to the market, I think
[2:34] Speaker 3: what traders are watching for really carefully is if Iran
[2:39] Speaker 3: begins to expand their attacks on infrastructure in the region.
[2:42] Speaker 3: That's when oil prices were one hundred and twenty dollars
[2:45] Speaker 3: in March. It was when you saw Iran attacking LNG
[2:48] Speaker 3: plants in Katar, refineries in the Middle East, oil fields
[2:53] Speaker 3: in Iraq, Kuwait, those That's really the real risk because
[2:58] Speaker 3: then it goes beyond the open of Hormuz and resumption
[3:01] Speaker 3: of traffic, and to potentially long term impacts on oil
[3:05] Speaker 3: production and refined product production that would have a larger
[3:11] Speaker 3: timeline for resuming and repairs.
[3:13] Speaker 2: The other thing that Trump said today was that additional
[3:16] Speaker 2: strikes made by the US could include a takeover of
[3:19] Speaker 2: carg Island. This is the Iranian key oil export hub.
[3:24] Speaker 2: That sounds like a pretty aggressive move, and I would
[3:26] Speaker 2: imagine I'm no military expert, but from what I've read,
[3:30] Speaker 2: that would imply that ground troops would be necessary if
[3:33] Speaker 2: it got to that level. I'm wondering how the market
[3:36] Speaker 2: would respond.
[3:38] Speaker 3: That would be spiraling into sort of a worst case
[3:41] Speaker 3: scenario situation. Like I was explaining before, it would elicit
[3:45] Speaker 3: a large response for Iran. It would likely result in
[3:50] Speaker 3: Iran also looking to target other assets in the region
[3:53] Speaker 3: to try to protect themselves. Now, I do want to
[3:56] Speaker 3: note that we've been down this road before. Trump has
[3:59] Speaker 3: threatened this before, and I think that's part of the
[4:01] Speaker 3: reason why the market isn't reacting as much. We're not
[4:04] Speaker 3: seeing oil prices really spike towards one hundred dollars. We're
[4:07] Speaker 3: still near eighty dollars for Brent. And yes, taking carg
[4:11] Speaker 3: Island would would be a major escalation. Let's let's first
[4:15] Speaker 3: talk about the physical impact That island accounts for about
[4:19] Speaker 3: one to two percent of global oil exports. Even when
[4:23] Speaker 3: even though Iran is sanctioned, they get a lot of
[4:26] Speaker 3: oil out, a lot of crude out on dark fleet vessels,
[4:30] Speaker 3: on their shadow fleet that allows it to go to
[4:33] Speaker 3: ports all over the world, some of which ends up
[4:35] Speaker 3: in China. So immediately you shut that down and you
[4:39] Speaker 3: already have a reduction of one to two percent of
[4:43] Speaker 3: global oil exports. But the larger impact is that this
[4:48] Speaker 3: doesn't this spirals into a wider conflict that make that
[4:52] Speaker 3: leaves Iran and Tehran remarkably desperate because they depend financially
[4:58] Speaker 3: on those oil exports. The second thing, the US takes
[5:00] Speaker 3: that away from them, then the negotiations will have to
[5:06] Speaker 3: break down. There will be no opportunity for reconciliation between
[5:12] Speaker 3: the two sides, because if the US were to take
[5:14] Speaker 3: that away from them, then they will be remarkably desperate.
[5:17] Speaker 3: So I think that is a fear to the market
[5:19] Speaker 3: if it does go down that route. But at the
[5:21] Speaker 3: same time, Trump has said a lot of things over
[5:23] Speaker 3: the last few months that haven't come to be, and
[5:26] Speaker 3: if he were to do that, you would see oil
[5:28] Speaker 3: prices spike again. And as we come up to a midterm,
[5:31] Speaker 3: Trump does not want high gasoling prices. If crude prices jump,
[5:35] Speaker 3: gasoline prices will follow, So that will have to be
[5:37] Speaker 3: part of the calculus that he has to think about
[5:39] Speaker 3: as he tries to put pressure on the Iranian regime.
[5:42] Speaker 2: So during that period that the Memorandum of Understanding seemed
[5:45] Speaker 2: to be in effect and the tentative ceasefire was I'm
[5:49] Speaker 2: going to use the term in force, the market came
[5:52] Speaker 2: down quite a bit, and you and I have spoken
[5:54] Speaker 2: about this fact, and in that period of a decline
[5:57] Speaker 2: in oil prices, it seems as though we had a
[6:00] Speaker 2: little bit more visibility into how much supply is out
[6:04] Speaker 2: there right now. Is that going to continue to be
[6:08] Speaker 2: the case or is that under threat? Given this new dynamic.
[6:11] Speaker 3: You know, the market is kind of starting to shift
[6:14] Speaker 3: to a bit of an oversupply, not in the sense
[6:17] Speaker 3: that you know, we're droughting and oil, but in the
[6:21] Speaker 3: sense that a lot of the buyers in Asia, for example,
[6:24] Speaker 3: had found replacements while or they were able to adjust
[6:28] Speaker 3: their demand. So what do I mean by replacements? It
[6:31] Speaker 3: means that they were able to when when they looked
[6:32] Speaker 3: at Horror Moves, they weren't sure when I was going
[6:34] Speaker 3: to open back up, And so you had places like
[6:36] Speaker 3: the Japanese government, You had India look to get LPG
[6:41] Speaker 3: from elsewhere, to get cruise shipments from elsewhere, to get
[6:43] Speaker 3: ethylene and other products from elsewhere. So now that the
[6:46] Speaker 3: now that when when you saw Horror Moves opening again
[6:49] Speaker 3: and you saw a lot of that oil starting to flow,
[6:51] Speaker 3: that oil was flowing into a market that was already
[6:53] Speaker 3: pretty well supplied. So you saw this a glut, but
[6:57] Speaker 3: it's a very near term clut. When you look at
[6:59] Speaker 3: the entire picture, inventories are are really diminishing. And even
[7:04] Speaker 3: the US, the spr has has the strategic petroleum reserve,
[7:09] Speaker 3: has been drained. Gasoline inventories in the US are at
[7:11] Speaker 3: the lowest seasonal level in over a decade. The JAB,
[7:15] Speaker 3: it's the same in Japan. In China, which really reduced
[7:18] Speaker 3: their imports do in Part two, lowering demand for oil
[7:22] Speaker 3: products also depended more on their reserves. So you're you're
[7:26] Speaker 3: you're in a world that has lower inventories. And while
[7:29] Speaker 3: there isn't a near term glut, how long this can continue,
[7:33] Speaker 3: especially with Hormu's remaining shut is something that the market
[7:36] Speaker 3: will have to carefully balance.
[7:38] Speaker 2: So let's change gears a little bit. Because the NATO
[7:40] Speaker 2: summit in Turkey just wrapped up. While he was there,
[7:44] Speaker 2: President Trump reached some sort of agreement that will now
[7:47] Speaker 2: allow Ukraine to manufacture Patriot missile interceptors. Now, you've got
[7:53] Speaker 2: to believe that the Russians are not going to be
[7:55] Speaker 2: thrilled with this development. And it came on us the
[7:58] Speaker 2: same day when Russia announced a short term ban on
[8:01] Speaker 2: diesel exports, apparently with a lot of the Ukrainian drone
[8:05] Speaker 2: attacks that we have seen recently on Russian infrastructure. There
[8:10] Speaker 2: is a shortage of diesel in Russia. Give me a
[8:14] Speaker 2: sense of where Russia fits into the global picture of
[8:18] Speaker 2: energy markets right now.
[8:20] Speaker 3: Russia is one of the biggest oil and products producer
[8:23] Speaker 3: in the world. And what's interesting is, yeah, Ukraine has
[8:28] Speaker 3: really expanded their abilities with drones and other weaponry to
[8:33] Speaker 3: sort of cripple the ability for Russia to produce products
[8:38] Speaker 3: for their own market and also for exports. There will
[8:42] Speaker 3: be I think it's a bit more nuanced because just
[8:45] Speaker 3: because you're reducing their ability to create produce products doesn't
[8:50] Speaker 3: mean that you'll cripple Russia's ability to export oil as
[8:55] Speaker 3: a whole. So what you saw is every time one
[8:57] Speaker 3: of these refineries goes down, Yeah, so Russia doesn't have
[9:01] Speaker 3: the ability to turn it into diesel or other products
[9:04] Speaker 3: that they would use downstream. But they have a bit
[9:06] Speaker 3: of an oversupply of oil, so they end up exporting
[9:09] Speaker 3: more crude into the global market because they just can't
[9:13] Speaker 3: use it at home, they have no ability to refine it.
[9:15] Speaker 3: So interestingly, and sort of counterintuitively, you might actually see
[9:21] Speaker 3: an increase in oil exports from Russia because of the
[9:24] Speaker 3: attacks on this infrastructure. But clearly, you know, oil markets
[9:28] Speaker 3: aren't just crude, so this does reduce the amount of
[9:32] Speaker 3: downstream products that will be coming into the market. Russia
[9:36] Speaker 3: is a supplier to some countries, and it will become
[9:39] Speaker 3: an issue at least domestically for Russia and the economy
[9:41] Speaker 3: because a lot of you know, for anything transport related,
[9:45] Speaker 3: they depend on these fuels. So it's going to put
[9:46] Speaker 3: pressure on Moscow.
[9:48] Speaker 2: So Steven, before I let you go, I want to
[9:49] Speaker 2: get your reaction to a little bit more detail now
[9:52] Speaker 2: that we are getting on the US military strikes against
[9:55] Speaker 2: targets in Iran. Apparently a lot of military sites and
[9:59] Speaker 2: poor facilities were really the targets here, and we are
[10:03] Speaker 2: learning now that in addition to Kuwait being under fire,
[10:07] Speaker 2: that Iran fired against targets in Bahrain and Cutter. And
[10:11] Speaker 2: I'm wondering whether or not there is a risk here
[10:14] Speaker 2: that if there is further escalation, we reach some sort
[10:17] Speaker 2: of inflection point or tipping point where it becomes more
[10:20] Speaker 2: difficult to kind of dial back from this level of conflict.
[10:24] Speaker 3: You know, they might be, but you know, I think
[10:26] Speaker 3: the places that you named are all military targets, and
[10:30] Speaker 3: that is key, right. If this remains the US hitting
[10:34] Speaker 3: military targets in Iran, and Iran hitting the US military
[10:37] Speaker 3: targets and bases in Qatar, Bahrain in other places, then
[10:42] Speaker 3: this is still just remains as a tit for tat
[10:46] Speaker 3: exercise between the two countries. But if it does spiral
[10:50] Speaker 3: into the US hitting energy infrastructure power plants, then we're
[10:55] Speaker 3: in a danger zone where Iran could do the same
[10:58] Speaker 3: thing to the region in the Middle East. So I
[11:01] Speaker 3: think you really have to carefully monitor these targets. And
[11:06] Speaker 3: if it does just remain military bases in places that
[11:10] Speaker 3: are key for naval operations for their Anian regime, then
[11:15] Speaker 3: maybe it won't spiral into the wider oil market, but
[11:17] Speaker 3: that is of course something that everyone will be watching
[11:19] Speaker 3: very closely.
[11:20] Speaker 2: Good insights, Steven, Thank you so very much, Bloomberg Steven Stepchinski.
[11:23] Speaker 2: He is Asia team leader for our energy coverage. Joining
[11:27] Speaker 2: from our studios in Singapore here on the Daybreak Asia podcast.
[11:37] Speaker 2: Welcome back to the Daybreak Asia Podcast. I'm Doug Krisner.
[11:41] Speaker 2: We go to China next, where the latest inflation data
[11:44] Speaker 2: was released. Consumer inflation slowed more than expected, with the
[11:48] Speaker 2: official CPI decelerating in June to an annual rate of
[11:53] Speaker 2: one percent. Meantime, at the wholesale level, PPI accelerated slightly
[11:57] Speaker 2: to an annual rate of four point one percent. And
[12:00] Speaker 2: that's where we began our conversation with Robin Ching. Robin
[12:05] Speaker 2: is the chief China economist at Morgan Stanley. He spoke
[12:08] Speaker 2: with Bloomberg TV host Heidi Stroud Watts and April Hank.
[12:11] Speaker 4: Did these numbers kind of change the trajectory when it
[12:15] Speaker 4: comes to what has been you know, managed but pretty
[12:18] Speaker 4: well sustained domestic slowdown for the Chinese economy.
[12:23] Speaker 5: Well, I think these numbers confirmed Chinese growth is equaling,
[12:27] Speaker 5: it's not breaking down. But the second quarter the TDP
[12:30] Speaker 5: is tracking at below government target, probably four point four percent.
[12:36] Speaker 5: If you look at the June CPI, it shows despite
[12:39] Speaker 5: earlier this year, global AI and the energy demand push
[12:43] Speaker 5: it up factory price, China's every day retail demand a
[12:48] Speaker 5: remand quite weak. So the core domestic pricing power is
[12:51] Speaker 5: simply not there yet. That's the key conclusion. PPI wise,
[12:55] Speaker 5: I do think it has probably picked at four point
[12:59] Speaker 5: one percent because if you look deeper, these regular long
[13:03] Speaker 5: mudity sectors in the ppi. They actually their profit margin
[13:08] Speaker 5: remain largely flat. They didn't benefit from all these upstream
[13:12] Speaker 5: price hikes. In fact that they got probably squiazed more
[13:15] Speaker 5: by the higher input price. So that's why I do
[13:18] Speaker 5: think these inflation data showed a quick reflation is largely
[13:23] Speaker 5: an illusion. China's inflation earlier this year was imported, it
[13:28] Speaker 5: was not local.
[13:31] Speaker 4: This increasingly ca shaped trajectory for the economy. It's interesting
[13:35] Speaker 4: to me because we're seeing also for the first time
[13:37] Speaker 4: the PBOC explicitly address it right. They've talked about the
[13:41] Speaker 4: structural structural divergence.
[13:44] Speaker 1: As a wedding that they use more or less.
[13:46] Speaker 4: Is this interesting to you too, because they're clearly is
[13:48] Speaker 4: a concern that now you've got an economy that has
[13:51] Speaker 4: taken AI and everything else that's lagging.
[13:56] Speaker 2: Well.
[13:56] Speaker 5: I think globally people talked about K shifty economy. The
[14:00] Speaker 5: top half of the K is AI and the instruction spending,
[14:05] Speaker 5: tech capax, but the bottom half everything else remained quite quiet.
[14:10] Speaker 5: But for China, I do think the challenge is probably
[14:13] Speaker 5: bigger our top half of the K which is an
[14:17] Speaker 5: advanced manufacturing green product. These are just structurally too thing
[14:23] Speaker 5: to lift the whole ship while the bottom half of
[14:26] Speaker 5: the K we talk about the old economy, we talk
[14:30] Speaker 5: about how then these are much more labor intensive. This
[14:34] Speaker 5: has much bigger spill over to job and consumers, and
[14:38] Speaker 5: these bottom half of the K in China is probably
[14:41] Speaker 5: too heavy and sick. That's why, to be honest, I
[14:45] Speaker 5: do think China need to balance its policy approach to
[14:49] Speaker 5: address its own K ship economy. The challenge is probably
[14:52] Speaker 5: even bigger than many other economies, for example East the
[14:56] Speaker 5: Asian economies. Who who's the AI in structure? Booming part
[15:00] Speaker 5: of that top half of the K could mask weaknesses
[15:03] Speaker 5: in other sectors. China cannot rely alone on heart tech.
[15:07] Speaker 5: It need to focus more on domestic consumption demand.
[15:12] Speaker 6: So what sort of policy support might you be expecting,
[15:15] Speaker 6: especially for the bottom half of the K And are
[15:18] Speaker 6: you expecting this at the bureau? What sort of signals
[15:22] Speaker 6: are you anticipating?
[15:25] Speaker 5: Thank you for mentioning the next catalyst the July Polity
[15:28] Speaker 5: Buriu meeting. I do think with second quarter tracking at
[15:32] Speaker 5: below government and your target, the urgency of doing something
[15:36] Speaker 5: is definitely rising. But to do a reality check, we
[15:40] Speaker 5: also know Basing probably preferred supply centric policy approach rather
[15:46] Speaker 5: than shifting towards public services on social welfare to unlock
[15:52] Speaker 5: a consumption. For example, when we talk to think tanks
[15:57] Speaker 5: in Beijing, a lot of the focus is on building
[15:59] Speaker 5: these to supernets. The super net for computing power basically
[16:03] Speaker 5: AI data center, and the smart net for power supply,
[16:08] Speaker 5: the ultra high voltage power grade with energy storage, and
[16:12] Speaker 5: I do think to boost a third and force quote
[16:15] Speaker 5: growth to have some bonds back in activity. Beijing will
[16:19] Speaker 5: probably largely utilize the leftover budget deficit. In fact, if
[16:24] Speaker 5: you look at government bond quota and the quota physical tools,
[16:29] Speaker 5: there are roughly i'm b two trillion sitting there. They
[16:32] Speaker 5: will be utilized in the second half of this year.
[16:36] Speaker 5: But Beijing were largely posic capital into instructure AI and
[16:42] Speaker 5: the power supply. If I were, if I can propose
[16:45] Speaker 5: to polerty makers in Beijing, I would advise them to
[16:48] Speaker 5: add another net, which is the social safety net, because
[16:53] Speaker 5: as you said, the subdued consumption is the main challenge,
[16:56] Speaker 5: and it's a combination of housing and a major gap
[17:01] Speaker 5: at the social safety net. If they can boost the
[17:04] Speaker 5: social welfare coverage for migrant workers three hundred million of them,
[17:09] Speaker 5: we do think it can unlock these precautionary savings and
[17:12] Speaker 5: boost the consumption eventually, but that will take some time.
[17:16] Speaker 5: For the second half post Polity Biller meeting is probably
[17:20] Speaker 5: the supply side, focusing on tech on AI on power supply.
[17:26] Speaker 6: What is that going to mean for your GDP growth
[17:29] Speaker 6: outlaw for this year? Is there a way then that
[17:33] Speaker 6: China can avoid the moderation from last year's five percent growth?
[17:39] Speaker 5: Well, the government has kind of lowered its own target
[17:43] Speaker 5: in a pragmatic way, right, so the rant is four
[17:46] Speaker 5: and a half to five. I do think with certain
[17:50] Speaker 5: acceleration of the bond and the CODI physical tools to
[17:55] Speaker 5: catch up on the instructure building in the second half
[17:59] Speaker 5: we may see some bounce back and the annual target
[18:02] Speaker 5: is still within reach, but that largely relies on instructure
[18:07] Speaker 5: and global trade. China benefited from the global supercycle on I,
[18:12] Speaker 5: instructure and energy spending, so their exports has been booming.
[18:16] Speaker 5: We do think the resilience of Chinese exports is the
[18:20] Speaker 5: bright spot. It will continue to march on, expanding from
[18:24] Speaker 5: advessed attack guring energy to a lot of other sectors
[18:27] Speaker 5: including capital goods. But as I mentioned, that top half
[18:31] Speaker 5: of the k is structurally too thing to have spillover
[18:34] Speaker 5: to jobs, to income, to consumer expectation. So unfortunately, even
[18:40] Speaker 5: if China can reach the annual GP target, that k
[18:43] Speaker 5: shapety economy is probably here to stay.
[18:49] Speaker 4: We talk about this kind of structural shift that needs
[18:52] Speaker 4: to happen with policy, But Robin, isn't this a really
[18:55] Speaker 4: big pitchure longer term shift?
[18:57] Speaker 2: Right?
[18:57] Speaker 1: The government has been wanting to.
[18:59] Speaker 4: Turn to domestic consumption for the last ten years, twenty years,
[19:03] Speaker 4: and it hasn't quite sort of happened to the strength
[19:06] Speaker 4: that you might expect.
[19:08] Speaker 1: Is it possible do you think with major.
[19:10] Speaker 4: Changes to social welfare, with major changes to what we've
[19:14] Speaker 4: seen with the property sector, for example, to be able
[19:16] Speaker 4: to turn around the demographic issues that the government and
[19:19] Speaker 4: the economy is now facing in the longer term.
[19:24] Speaker 5: Well, I do think you need the understanding of the
[19:28] Speaker 5: road blocks, the roadblocks for consumers, a compilation of housing.
[19:35] Speaker 5: The housing sector is still in decline. In fact, housing
[19:39] Speaker 5: investment as percentage of TOTO economy declined from the peak
[19:43] Speaker 5: level of sixteen percent to six percent. Basically home buyers
[19:48] Speaker 5: that are holding their cash, and we do not see
[19:52] Speaker 5: a true bottom for the housing sector until maybe late
[19:55] Speaker 5: twenty twenty seven. So that's one factor. The other one
[19:59] Speaker 5: is the media aapp on social safety net, migrant works,
[20:03] Speaker 5: lower income population, they don't have enough coverage or access
[20:07] Speaker 5: to those benefits. I know, you know in a lot
[20:10] Speaker 5: of type of policy debates, there is a certain view
[20:13] Speaker 5: that consumption is just the consequence of income. You cannot
[20:17] Speaker 5: boost the consumption, you should not to. But I think
[20:21] Speaker 5: that view is totally incorrect because you can definitely work
[20:25] Speaker 5: on the social safety net. If you know, job markets
[20:29] Speaker 5: remain weak. Met with the falling home price, naturally people
[20:33] Speaker 5: will lock their cash, lock their savings, and to unlock
[20:36] Speaker 5: them you need better social welfare. That's probably the key
[20:41] Speaker 5: fundamental reform to unlock China's domestic consumption potential. But we
[20:45] Speaker 5: need maybe another September twenty twenty four moment, that is
[20:50] Speaker 5: after saying or the social feedback. Finally, there is a
[20:54] Speaker 5: deep understanding of the issue and policy makers make a
[20:57] Speaker 5: firm decision of shifting resources away from investing in over
[21:02] Speaker 5: supply defectives, but shifting them towards public services social welfare.
[21:07] Speaker 5: That takes some time.
[21:08] Speaker 2: That was Robin Chan, chief China economist at Morgan Stanley,
[21:12] Speaker 2: speaking to Bloomberg TV host Heidi Stroud Watts and April
[21:15] Speaker 2: Honng bringing you their conversation here on the Daybreak Asia Podcast.
[21:21] Speaker 2: Thanks for listening to today's episode of the Bloomberg Daybreak
[21:24] Speaker 2: Asia Edition podcast. Each weekday, we look at the story
[21:28] Speaker 2: shaping markets, finance, and geopolitics in the Asia Pacific. You
[21:32] Speaker 2: can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,
[21:36] Speaker 2: or anywhere else you listen. Join us again tomorrow for
[21:39] Speaker 2: insight on the market moves from Hong Kong to Singapore
[21:43] Speaker 2: and Australia. I'm Doug Prisoner and this is Bloomberg

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