Nomura's Subbaraman: Getting Worried About China's Banks

The discussion highlights China's economic challenges, including high debt, unemployment, and deflation. Current policy measures are deemed insufficient to revive the economy. While some sectors like services and EVs show potential, the property market remains weak. A stronger policy response is needed to address structural issues, with concerns about banks being used as policy tools.

What are some of the structural issues currently affecting China's economy?

• High debt levels and youth unemployment

• Low inflation and high consumer confidence

• High manufacturing output and low debt

• Strong property market and low unemployment

Which sectors have shown some recovery after the reopening?

• Real estate and construction

• Banking and finance

• Manufacturing and agriculture

• Domestic tourism and electric vehicles

What percentage of GDP does the property market account for in China?

• 40%

• 20%

• 10%

• 30%

What is the speaker's concern regarding the banking sector?

• Banks are investing heavily in foreign markets

• Banks are reducing their workforce

• Banks are being used as a policy tool, affecting profitability

• Banks are increasing their lending rates

What does the speaker suggest is necessary to address the economic challenges?

• Increased foreign investment

• Reduction in government spending

• A piecemeal approach

• A forceful policy response