China’s economic recovery story has been largely disappointing, but the economic powerhouse is seeing stellar growth in one particular sector, says Standard Chartered’s Bill Winters.
“Electric vehicles and everything around sustainability and renewable energy technology. In those areas, China is absolutely booming,” the bank’s CEO said on the sidelines of the Global Financial Leaders’ Investment Summit on Tuesday.
While China’s recovery is still “a bit bumpy”, the country is also building a more resilient, sustainable and stronger economy, he said.
And his playbook? “Gradual decompression in the old economy sectors and acceleration in the new economy sectors,” Winters added.
China boasts the world’s largest EV market, with 5.9 million units sold in 2022, accounting for 59% of global EV sales, according to research from Canalys. In addition, data from Counterpoint Research shows that domestic brands account for 81% of the EV market – with BYD, Wuling, Chery, Changan and GAC among the top players.
Conversely, the property market has been hit by weakening consumer confidence as property giants Evergrande and Country Garden remain mired in debt problems.
Standard Chartered has reduced its exposure to China’s troubled property sector and is well insulated from the market, Winters said. While he said it’s too early to call a bottom in China’s property market, markets are “well into the second half of this property decompression”.
Just last week, the UK-based bank announced that its pre-tax profit for the third quarter of this year plunged 33%.
China’s post-covid recovery has been slowing since April. The recovery has also been hampered by the property slump, which accelerated over the summer despite many major cities easing 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’ve been here for nearly 170 years. It’s our biggest single market,” Winters continues.
Standard Chartered’s offshore business, with Hong Kong as its hub, is growing between 50% and 60% a year, Winters said. “So it’s a huge growth story for us.”
