- China’s economic recovery story has been largely disappointing, but the economic powerhouse is seeing outstanding growth in one particular sector, Standard Chartered said.
- Winters noted that while China’s recovery is still “somewhat bumpy,” China is building a more resilient, sustainable and stronger economy.
A Chinese flag flies in front of a residential complex in Beijing on April 30, 2017.
Greg Baker | Afp | Getty Images
China’s economic recovery story has been largely disappointing, but the economy is posting outstanding growth in one particular sector, said Bill Winters of Standard Chartered.
“Electric vehicles and everything related to sustainability and renewable energy technology. China is absolutely booming in these areas,” the bank’s CEO told CNBC’s Emily Tan on the sidelines of the Global Financial Leaders’ Investment Summit on Tuesday.
While China’s recovery is still “somewhat bumpy,” the country is also building a more resilient, sustainable and stronger economy, he said.
And his playbook? “Gradual relief in old economy sectors and acceleration in new economy sectors,” Winters added.
According to a study by Canalys, China has the world’s largest electric vehicle market with 5.9 million units sold in 2022, accounting for 59% of electric vehicles sold worldwide. Additionally, data from Counterpoint Research showed that domestic brands account for 81% of the electric vehicle market – with BYD, Wuling, Chery, Changan and GAC among the top performers.
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Conversely, the real estate market is suffering from declining consumer confidence as real estate giants Evergrande and Country Garden remain mired in debt problems.
Standard Chartered has reduced its exposure to China’s struggling real estate sector and has a strong stance on that market, Winters said. While he said it was not yet advisable to predict the bottom of China’s real estate market, markets were “well into the second half of the real estate decline.”
A residential complex built by Evergrande in Huai’an, Jiangsu, China on July 20, 2023.
Future publishing | Future publishing | Getty Images
Just last week, the UK-headquartered bank said its pre-tax profit fell 33% in the third quarter of this year.
China’s recovery from the Corona crisis has been slowing since April. Another obstacle to the recovery is the housing decline, which accelerated over the summer even as many major cities eased restrictions on home purchases.
Nevertheless, China remains an important market for the bank. Others include India, the United Arab Emirates, South Korea, Singapore – and Hong Kong.
“Hong Kong is a core market for us. We have been here for almost 170 years. It’s our single largest market,” Winters continued.
Standard Chartered’s offshore business, with Hong Kong as its hub, is growing between 50 and 60 percent a year, Winters said. “So it’s a huge growth story for us.”