On December 19, at the "Alpha Summit" jointly hosted by Wall Street News and CEIBS, Xing Ziqiang, Chief China Economist at Morgan Stanley, delivered a speech titled "China's New Chapter: Technology and Rebalancing."
He emphasized that the policy shift since September 2024 has been pivotal in reversing China's economic trajectory. Chinese enterprises have demonstrated remarkable resilience and innovation despite geopolitical and regulatory challenges, securing leading positions in multiple cutting-edge technology sectors.
However, Xing noted that relying solely on high-tech productivity and overseas expansion may not suffice to address domestic demand weakness. The key to revitalizing China's economy lies in stabilizing the property market, shifting fiscal priorities from "investing in infrastructure" to "investing in people," strengthening social security, and stimulating consumption to rebuild growth momentum and market confidence.
**Key Insights from the Speech:**
1. **Policy Shift & Corporate Resilience** The post-September 2024 policy adjustments have reinvigorated capital markets and corporate confidence. Chinese firms have excelled in robotics, biopharma, next-gen batteries, and other advanced fields, leveraging China’s unparalleled industrial clusters and talent pool.
2. **Domestic Demand Challenge** While tech-driven sectors thrive, traditional industries—especially property and consumption—remain under pressure. Historical lessons from Japan and Germany show that overseas expansion alone cannot compensate for weak domestic demand in large economies like China.
3. **Property Market Stabilization** China’s property downturn, now in its fifth year, aligns with global patterns where recovery typically takes 6–7 years. Policy interventions, such as mortgage subsidies and inventory absorption, could accelerate stabilization, particularly in high-tier cities.
4. **Social Security Reforms** Strengthening social safety nets is critical to unlocking consumption potential. Proposals include reallocating state-owned enterprise dividends to social security funds and expanding rural pension subsidies to ¥1,000/month by 2030.
5. **Fiscal Restructuring** Transitioning fiscal expenditure from infrastructure-heavy "investment in things" to "investment in people" (e.g., healthcare, pensions) can reduce precautionary savings and boost consumer spending.
**Conclusion:** While China’s tech advancements promise long-term gains, short-to-medium-term economic stability hinges on addressing property market risks and enhancing social welfare. By 2027, concerted policy efforts could pave the way for sustainable growth.
*[End of Summary]*
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