YouSaid · the spoken record

Richard Koo

lines on the record: 38
first: 2024-10-17
most recent: 2024-10-17
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I think I also mentioned that every December there will be the Central Economic World Conference. It typically happens during the Christmas season. But yeah, I think that's the things we are going to closely watch for. And also sign up for my newsletter.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first of all, watch for the National People's Congress standing committee meeting of ratifying the size of the fiscal stimulus out of the finance ministry because the finance minister made it very clear that we can't tell you now because it has to be ratified. And that's something very important. And so what exactly the size of that stimulus, I think the very respected Chinese news magazine, Tai Xing, has already put out some numbers and I believe Bloomberg had also quoted that number in the terminal. And that's something very important. And also, you know, China has this five-year planning. And so next year China will be making up its 15th five-year plan. And so that's a mid-term to long-term prospect and one can gorge if there is any directional change in terms of that.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“So unpredictable. And nobody knows what you wake up in the morning 5 a.m. and tweet out. And I'm not sure Beijing is really a big fan of that. But as Rashoshi pointed out that Donald Trump is probably going to mess up the alliance with Europe and a lot of US allies, which if you really take 30,000 feet view could be good for China because the US messes up its alliance system. But in my understanding, the course is unpredictability. You have to face the drama on a weekly basis. So there are pros and cons. And I think the Chinese attitude is we will stand on our ground and China will stick to its principles and defend its interests, whoever gets into the White House in power. I'm really not sure. There is a clear preference for who is going to be the president of the United States.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“A discussion in China about the because this is like the most important election in the world, and it's gonna have very big impact on China-US relations. I think the thinking is that if Commander Harris became the president, she will some sort of continue the path that President Joe Biden has already laid out, it's going to be some sort of stabilization of the status quo. I mean, make no mistake, nobody has any illusions about China-US relations these days. It will be difficult for both sides, and there will be disagreements and even not armed conflicts, but serious disagreements. But it will be predictable and probably manageable. But Donald J. Trump to become the next president, well, I'm a Chinese citizen. I really don't want to interfere with US elections, but I think the thinking is that he's just...”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you mentioned here, you mean in China, right? I think Rash Dorshi, the former deputy senior director of National Security Council of the White House, wrote something either yesterday or the day before yesterday on the New York Times, which is a very helpful read. And he's clearly trying to help Kamala Harris. And I think there is this discussion about basically whether China wants a democratic president or Donald Trump's second presidency. First of all, I think the Chinese official's sense is this is domestic affairs of the United States and we don't interfere with the United States domestic elections. And I think at least in this round, if you examine the responses from the US officials, including those in the intelligence community, if I'm not mistaken, they have said they did not see any instance of Chinese interference in the US elections. I think this is also...”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“More correspondent as a former journalist, I really want to highlight this China has been unable to send its journalists to the United States and it's also very difficult for New York Times, Bloomberg, Washington Post, Wall Street Journal to have its journalists on the ground in China. This doesn't help anybody. And as the two countries get their relations right, I sincerely hope that the two sides can figure something out to have more journalists in each other, which would help with understanding China better and understanding the United States better.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“In the Chinese, there is no such mechanism of centralized news publication by the central authority. That function is delegated to the state media. So at Xinghua News Agency, at the China Central Television, at people stealing newspaper. So in a sense, these state media are playing a role of the White House communications team. you know the TV footage of the Chinese president of the Chinese premier who they meet and what happened in China these meetings the readouts are directly put out by the Chinese state media so the roles the setup and of course you know the political system and also the discretion they have are indeed vastly different from that of the United States and you mentioned the role of foreign news media I think very unfortunately and this is something as a foreign”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a big row of these Chinese citron news agencies and newspapers communicating Beijing's policies and intentions and of course facilitating a domestic discourse that's favorable to the Chinese government because you know the Chinese government believes this is the best way for the country to move forward and I think there is a crucial difference between the Chinese new system and that is practice for example in the United States in the United States in the White House you have a press communications team so whatever President Joe Biden or Vice President Harris put out is put out by the White House and then picked up by the White House press corps and then picked up by the news media which based on their own editorial standards decide to report it or not to report it.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, sure. So some personal background I was born and raised in China. I'm totally educated in China. So after college in 2011, I joined Tsinghua News Agency, the state news agency. I worked for 11 years there. For the first six and a half years, I worked in two provincial bureaus. So basically a local news reporter, and then I worked in Europe and then in Beijing headquarters. There are Xinghua news agencies, there is what is now known as China Media Group, which is the state broadcaster, and then there is China Daily, and there is also People Daily, which is more better known as the flagship newspaper of the Communist Party of China.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“From a security or military perspective, but now I think the Chinese government is working on basically reduce, deregulate this place. So there can be a lot of opportunities. So, yeah, there are still a lot of things to be done.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's right. And also it's related to the rural land reform. And, you know, because if you don't have the huko household registration in the cities, your children can't go school in the city. So your children had to go to a rural school. And so that means you can't move your family over there and you can't buy an apartment over there. You can't buy the TVs and decorate the house. That's a lot of consumption potential over there. So I think on the bright side, there is a reason for optimism for China's long-term growth is simply because there is just so much things to do. There is just so many things that can be done. And, you know, in China this very recent talk of low altitude economy, which basically for airspace less than a thousand meters, so you can use drones to do logistics and it can work on agriculture and a lot of things. But in the past, it was not possible because there were a lot of regulations about airspace. Sometimes”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“By making it much easier for them to relocate into cities, to enjoy the social benefits, and so that they would no longer be stuck to their rural land, that could increase the productivity under unleashed consumption as well. And I think this is actually...”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's not looking well because part of that is demographic changes. You will have more old people and no longer so many young people. So that's under stress as well. So one big part of the current ongoing discussion is for the government to spend more money into pension, into strengthening the medical care for the system. And another very important is institutional reform. So, you know, paper, China's urbanization rate is something like 65%, but only 48% of the people have urban household registration. So that means there is still many people who actually work and live in cities, but they do not have the sort of legal household registration in Chinese cities, which means they are not entitled, they cannot enjoy the benefits of education, medical care, and those cities, they actually live in. So if similar reforms”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think you mentioned the social safety net. That's very important. And a lot of Chinese experts have been openly calling for in the past several years. It's basically for the government to spend more money to devote more resources to enhancing, to broadening, to strengthening China's social safety net. China's GDP per capita is $13,000, something like the 78th in the world, but it has built up a universal healthcare system. And so basically, I don't know, 1980, 99% of the people have some sort of health insurance. And basically they just have to pay a portion of their medical cost. But as you correctly mentioned, the social safety net, perhaps as a result of the overall national economic development, is still not thick enough. It's just not enough. And there is a national pension system.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'm sorry. So the concern was you shouldn't just shut down the tap too fast. You should still leave some room for the housing sector to softly phase out, to be decreased in the importance of the economy. So that's definitely something because you are seeing now the Chinese government is encouraging the banks to lend to I think there is this emphasis of frugality in the Chinese mind, is that you got to eat bitterness. You got to spend little money and save for the future. And that is still in the mindset, in the philosophy of Chinese decision making.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think the three red lines are a very good example. And there are a lot of scoring pushback against three red lines, especially by some professors at the National School of Development at Pikin University, one of the top universities in China. You know, the three red lines basically to sum it up to make financing for real asset companies much more difficult. So the concern is you are pushing too hard.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Help to the households and you know to basically solve the needs of the most unfortunate who are suffering the most but on the other hand I think the direction is still very clear it's like technology build up and yeah”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Have an old Huawei phone or Xiaomi phone or iPhone or a TV screen, you can give it back and get a new one where the government will give you a relatively big subsidy in the process, where they are encouraging the factories to basically to replace their old equipment. This put together is known as Liang Xing 2 New. And also there is also another large investment project called in Chinese Liangzhong, two key industries, which is two key sectors, one of which is known as the major projects of the nation and the other is known as the major projects that strengthen the security capabilities of the Chinese nation. So these two key and there's the resistance. These are promoted by the NDRC in the press conference to everyone that this is our way of stimulate domestic demand. So far, as you can see, they're trying to give some”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“In the developed markets. But if you read the NDRC National Development and Reform Commission, which is typically known, described as the top economic planner in China, their plan to revitalizing domestic demand is categorized into basically two things. One is consumption, where it mentions, for example, China gave some subsidies to very poor people before October 1st. And secondly, the Chinese government gave more scholarship to college students and increased the student loans. The range, for example, used to be 5,000 yuan, but now it's 7,000 yuan. And on the other hand, the Chinese government also announced that they are still trying to promote the domestic demand from an investment point of view. What they are trying to do is, you know, there is this ongoing trade-in movement basically if you have”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Hardware innovation sexy and even at the expense of maybe some consumer internet. So in the Chinese policymaking view, this hardware-based machines, tools, these are very, very important. And I think from the very recent, even from the press conference given by the Ministry of Finance and the NDRC, we can have some clues to that because a lot of the talk among especially Western China watchers is that they believe the insufficient domestic demand has to be basically countered by giving money, giving direct subsidies to the Chinese population or basically to have the households have a bigger share of the Chinese economy because when compared to other economies, the government share of the economy in China is significantly larger than that.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“To roll actually within China's discourse and its policy making process. But I think it's the sort of, they have this determination, which is Basically, China needs to advance to a different level of economic development. So they are willing to pay for the pains and the costs in this transition, which is going to be a long-term process. You know, this is something that is ironed into many Chinese minds. It's basically, you know, China makes a billion t-shirts to pay for one Boeing plane from the United States or Airbus from Europe. But China is now trying to make its own C919 aeroplane and it wants to have its own very robust semiconductor sector. It is already the largest shipbuilding power in the world followed by South Korea. So it wants to pivot to this higher value manufacturing with a lot of scientific and technology input into these industries. And to make this, you know,”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a very good question, and I think it's a million dollar question. And there are indeed complaints and speculations if there is some sort of echo chamber or in the Chinese, a more popular term information cocoon at the decision-making level. And I translated and contextualized the speech in my technology newsletter just, I think, a few days ago by a formal central economic official, which vehemently denies that. I think in this formal official and in the Chinese official way, discourse the government insists that they are not sitting in some sort of information cocoon or echo chamber. They are monitoring the situation very closely. They know what the people are talking about. They know what financial times and Bloomberg are reporting. They are aware, you know, yeah, I think actually foreign media, international media have an outside.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Two or three years, I think, is actually a comeback to the priority of growth. For example, I think in the very important central economic world conference last year, it was highlighted that development was still the top priority. You know, when I was relatively young when China started the reform and opening up in the late 1970s, that's the slogan. Development is the top priority, which implies that economic growth is everything. But then especially after the very devastating four-year COVID and China's drastic restrictions to contain the”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“I think actually that changed quite a few years back, so after Xi Ping came to power, after China's economy transitioned to a mid to high growth numbers, and there were a lot of collateral damage from the high-speed growth, for example, environmental degradation. So a few years into his administration, the current Chinese president actually, I think that actually started even in his predecessor, which highlights what's in the Chinese party speak calls scientific development. So it's not just an emphasis on, you know, whether it's 8%. It has to be 8.2%. It was no longer that. And there are more attention paid to also security. And to resilience. So that was not a single emphasis on the growth rate for quite some time. What we are seeing in the past”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“The Chinese banks have been encouraged by the government basically to continue to lend to the developers, and there is also a political consideration in this. It's because in China, most of the apartments are sold before they are delivered. So people have already put down a down payment and they are paying their mortgage. But if they can't get the apartments that they have been promised, but they had paid for them, then there will be social rest. People will go to the streets to protest. So that's a huge issue for potential social instability. So from that perspective, the real asset industry is, I guess, too big to fail on a certain extent.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“And a lot of the biggest real assets developers have defaulted on that, and the Chinese government is very rigid, is very reluctant to help these companies. But at the end of the day, I think there has been this reckoning, which is you gotta have some sort of real estate revival. And because it's just such a large portion of the Chinese economy, you know, the overall Chinese strategic plan is basically to have more high-end value added manufacturing and which will take a bigger share of the economy at the expense of the dwindling housing mechanism share. But that transition has to be a gradual process which has to be managed as smoothly as possible. So maybe just eradicating the real assiduity is just not possible. So right now, I think”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the background is in China a lot of local government finances used to rely on basically sales of land to real estate developers because by Chinese constitution all the urban land are owned by the state, which in effect is the city governments where they are in. But because of the housing slump we are in right now, this revenue has basically stopped. So the plan drawn up in the July meeting of the Communist Party of China Central Committee was that there will be a sort of tax and fiscal reform where the local governments will be given new revenue or a bigger share of certain tax revenues to replace the dwindling land sales. And the housing market is estimated to account for, I think, something between 15% to 30% of the China's GDP. So basically it's in crisis.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“The Ministry of Urban Affairs, of the housing ministry basically, they would under the mandate given by the central leadership tell everyone, you know, it's time to relax all the housing restrictions, but they wouldn't tell Shenzhen or Chongqing or Chengdu or Wuhan what to do exactly. They would send the signals and the local governments will digest the signal and then make their own decisions.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“The literature on the China miracle for the past three or four decades. One of the most prominent theories is that China, in fact, has a sort of tournament for local government officials who ever get the GDP grew fastest or have the best investment projects, for example, the Giga Factory of Tesla in Shanghai, then they get appreciated and probably they would move up the career ladder. So indeed, it's very important. Also, China is a huge country. It's the world's second largest economy with over 30 provinces, 1.4 billion people.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think some background should be given because granted, China is a unitary state. So it's not a, at least politically, it's not a federalist system. So people's perception, especially Westerners and the American perception, would be, it's just women telling everyone what to do on every single matter. So that's obviously not true. And for example, probably many people are not aware. Like local government spending in China's overall government spending is at, I think, 83 or 85%. And so the central government spending in China as a part of the overall spending is only 15%. If you compare that to all the advanced market economy in the world, it's among the lowest share in the world. So from that perspective, the Chinese, at least in terms of fiscal spending, is very, very decentralized. And also, if you examine...”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Implemented by the different ministries, which of course involves their contribution significantly because I wouldn't imagine China's top leader to have such very specific details in whether it should be 100 billion or 200 billion, these very important numbers and plans sure are drawn up by the technocrats. And also there are a lot of think tanks, university research institutions, by college professors, and they would have their own channels to submit their observations or they make their comments publicly and which are also monitored by the leadership. There is no First Amendment in China, to be frank, but there is still a substantial discussion of substantive policies. So all of these things contribute to the decision making to the Chinese leadership.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Caught the attention of the leadership, they would typically make written instructions or give oral instructions, which really put things to work. And it has to be formalized at a meeting. And the most important one is a political bureau meeting. And in China, I also just mentioned a state council executive meeting. The state council is like the Chinese government cabinet or the PBOC, the NDRC, the Ministry of Finance, or the Ministry of Public Security, all the tax bureau, they are all subordinate to the state council. So the state council, their mission is to implement the decisions of the Communist Party of China Central Committees, political bureau. So it's the political bureau meeting, the state council executive meeting, and then translates to specific deployments, rate cuts, fiscal spending.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“You are way too humble. And yeah, I think of all the meetings I've mentioned, the most important one is certainly the political bill meeting, which in China happens every month. So traditionally they will focus on the economy at the end of the year, for example, because in every December, which just two months away, there will be a central economic work conference which will make up economic development plans for the next year. But September's political bureau meeting is an exception. So I think the typical process is that all these Chinese bureaucratic agencies, all the ministries, all these committees that are part of the Communist Party of China, they monitor the situation of the economic data, what are people saying, what are Bloomberg reporting, and then they draw up plans and they submit to the Chinese leadership. And so when there is an instruction, when certain”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“The past two or three weeks out of the expectation, that's indeed very significant. And some of these numbers, not what China got used to for the past two or three or four years, especially since COVID, I mean, let's not kid ourselves, the market expectation for the Chinese government to make some stimulus policies has been high. And there is this awareness both inside China as well as in the international market that had hoped for some sort of intervention for quite a long time, but it didn't come. So suddenly it came.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“The governor of the central bank announced the PBOC was going to lower the reserve ratio. Banks that put money at the central bank that cut the interest rate, lower the mortgage rate that Chinese residents pay for their housing, and also establish a swap facility, as well as another lending facility to help the stock market to have so many measures put together at a single press conference and followed by a very decisive announcement by the finance ministry that they are working on a fiscal stimulus, but they haven't announced the number because by Chinese law this sort of fiscal spending has to be approved by the legislature, which is a National People's Congress Standing Committee. So they haven't announced the number. So putting everything together within.”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“I do think this is quite significant. I think we can look at this from a number of perspectives. First of all, by transition, the political bureau of the Communist Party of China just doesn't have a meeting in September to focus on the economy. That didn't happen. And so this is an exception. And for the governing party of China to dedicate out of its past transition on the economy, last send a political signal. So, you know,”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe one of the reasons for the recent economic measures was that China is maybe very difficult to reach the 5% growth rates for the year of 2024. And also the Federal Reserve cut its policy rate, which opened the room for, you know, Chinese counterparts”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think all these developments were caught the market and all the observers by surprise because nobody actually thought this coming. So what started this recent event is a press conference given by China's financial regulators led by the central bank, which is a People's Bank of China on, I think, September 24th. So after that, two days later, there was a political bureau meeting of the Communist Party of China. And following that, there was a state council executive meeting. And then we had a press conference by the National Development and Reform Commission. And then the finance ministry, which happened on Saturday over the weekend. So as you correctly said, Joe, there were a lot of policy announcements. And I think right now it's October and China just published some macroeconomic data. A lot of people are saying that”
2024-10-17 · Odd Lots · Richard Koo and Zichen Wang on What Just Happened in China · IDENTIFIED FROM THE TRANSCRIPT · source