HSBC’s chief financial officer says HSBC is “very optimistic” about the future of China’s economy | Wilnesh News

HSBC The Bank of England’s chief financial officer told CNBC that despite the current headwinds, the Bank of England is “very optimistic” about the mid- to long-term prospects of the Chinese economy.

China’s economic growth has been weighed down over the past year by declines in traditional economic pillars such as real estate, infrastructure and exports. This has prompted Beijing to step up efforts to support manufacturing and domestic technology to modernize the economy and maintain global competitiveness.

HSBC Chief Financial Officer Georges Elhedery said in an interview with CNBC reporter Karen Tso on Wednesday that the bank, which is headquartered in London but has extensive operations in Hong Kong and throughout the Asia-Pacific region, is confident that it will become the world’s second largest bank. Economies will overcome the difficulties. short-term resistance.

“We are looking at the major economic transformation that is taking place, which gives us every reason to be very positive about the medium- to long-term prospects,” El-Khadri said.

He said that China’s economy has matured and now is “the best time to transform into a more mature economy.”

Elhedery describes this maturity as greater reliance on consumers, services and high-value and sustainably driven products such as electric vehicles and batteries, a desire he says is evidenced by the Chinese government’s recent push into these industries.

“This shift will mean that China will avoid falling into the middle-income trap and be able to continue its growth model,” he added.

“Some Western economies have gone through these transformations in the past, and China is going through a transformation today. This gives us a lot of positive views on China’s mid- to long-term prospects.”

El-Khadri said more pressing economic challenges could last “a few quarters to a few years,” but expressed confidence that China would be in a better position in the long run because it has positioned itself “substantially Better forward-looking”. track. “

HSBC missed full-year 2023 pre-tax profit guidance due to a $3 billion writedown on its 19% stake in China Bank of Communications, while it cut its overall exposure to Chinese commercial real estate by $4.6 billion year-on-year .

However, Elkhedri insisted on Thursday that most of the challenges related to China’s property market slump were “a thing of the past”, although he said the industry was not “out of the woods” so far.

“We think the bottom is over for the industry. We think, for our purposes, our exposure and ECL (expected credit losses) cover most of the expenses behind us, but that still means that as the industry continues Developments, there will be lingering effects as adjustments are made, we may continue to see some impact, but it won’t be as affected as credit charges were last year,” he said.