China’s economic recovery story disappoints in some sectors, but not all
China’s economic recovery story has been a largely disappointing one, but the economic powerhouse is seeing stellar growth in one particular sector, according to Standard Chartered’s CEO Bill Winters.
Winters pointed to the booming electric vehicle and sustainable and renewable power technology sectors in China as areas of exceptional growth despite the bumpy nature of the country’s overall recovery.
“Electric vehicles and everything around sustainability and renewable power technology. In those areas, China’s absolutely booming,” Winters told CNBC’s Emily Tan on the sidelines of the Global Financial Leaders’ Investment Summit.
While China struggles with the recovery of its economy, the country is also building a more resilient, sustainable, and stronger economy overall, according to Winters. He explained that China is gradually decompressing the old economy sectors and accelerating in the new economy sectors.
China currently boasts the world’s largest EV market, with 5.9 million units sold in 2022, capturing 59% of EVs sold globally. The domestic brands make up 81% of the EV market, with companies like BYD, Wuling, Chery, Changan, and GAC among the top players.
In contrast to the growth in the electric vehicle market, China’s property market has been embattled by faltering consumer confidence, with real estate giants Evergrande and Country Garden being mired in debt problems.
Despite the difficulties in China’s real estate market, Standard Chartered has been cutting exposure to the troubled property sector and is well prepared to withstand market challenges.
Winters acknowledged that the UK-headquartered bank’s pre-tax profit for the third quarter of this year slumped by 33%. China’s post-Covid rebound has been slowing since April due to the property market slump, but China remains an important market for the bank.
Other important markets for Standard Chartered include India, the United Arab Emirates, South Korea, Singapore, and Hong Kong, with Hong Kong being the bank’s largest single market. The bank’s offshore business, with Hong Kong as the hub, is growing between 50% to 60% per annum, making it a significant growth story for Standard Chartered.
Despite the challenges in some areas, the growth in the electric vehicle and sustainable and renewable power technology sectors in China is a testament to the country’s ability to adapt and thrive in the face of economic uncertainty.