pitch neisseria new zealand and australia. ♪ >> a quick check of headlines. peru's supreme court deciding whether to keep former president castillo in custody. protesters demanding his release and blocking roads. eight have been killed as the unrest began more than a week ago. castillo has been charged with rebellion and conspiracy after illegally trying to dissolve congress >> prosecutors say one week ago when he tried to dissolve congress, he was on his way to the mexican embassy to

take an asylum at the mexican embassy and it is like he would flee the country. that is why they have been very forceful in their arguments, saying it is a flagrant rebellion and the fact that he may leave the country, they have asked for the judge to sentence him to stay for the next 18 months in prison. >> thousands in turkiye have rallied against the conviction of istanbul's mayor ekrem imamoglu. a court found him guilty of insulting public officials in 2019. he was sentenced to more than two and a half years in prison wednesday and has been banned from holding political office. he was among those seen as a challenger to president erdogan and elections next year. dozens are feared to be trapped in a landslide in malaysia at a camping ground here who well of

them poor. rescued that online russian shelving as killed two in curse on. -- kherson. millions of ukrainians are enjoying freezing yours without power. >> thousands of nurses in the u.k. are on strike in their first-ever national walkout the government says it can't afford the 19% pay raise they are demanding to address the long-term impacts of inflation. it is offered an increase just over water sent. the news continues. ♪

>> the latest economic data from china paints a gloomy picture with slow growth. the world bank warns of a worldwide recession. what could problems in china mean for the global economy? ♪ >> hello and welcome. the saying used to be, when america sneezes, the world catches a cold. now the global focus is just as much on china. covid has that an impact on the world's second-largest economy and it is contagious. when the latest data from

beijing showed weaker results, concern spread red -- spread worldwide. first, richard kimber in hong kong tells us about the reaction to the figures. >> there is unease and uncertainty among the chinese public about just how successfully country can manage the crucial transition probe this transition period. to now, one in which society and the economy are rapidly opening. talking to business consultants, they say that employees are finding their workforce are reluctant to go to the office and to the companies themselves are elect to hire new staff. all because of an uncertainty about the future of the economy in the future of covid-19 transmission risks in a country that has largely been insulated from any type of widespread transmission because of there being so many rules and restrictions in place. that logic meeting some parents are reluctant to send children to school. shoppers on the street to not

want to go to busy places or spend much money because of this uncertainty over the how the next few months will unfold. analysts say this will likely setback by some months any chance of there being a quick and efficient rebound in china. they are expecting it may be the middle of next year before we see anything close to the type of pandemic the mesh that china was used to. affecting not just domestic chinese companies, but international companies who rely so heavily on china's manufacturing capability for their global supply chains. the next few months are seen as a crucial step in china's covid-19 experience to see just how much the awards second -- the world's second-largest economy can bounce back. >> according to china's national bureau of statistics, retail sales fail nearly six foot -- fell nearly 6% from a year ago.

industrial production growth slowed to half of october's growth. property investment, which accounts for as much as 30% gdp has punished. unemployment worsened, rising to nearly 6%. >> let's go ahead and bring in direct guests. the senior research fellow at the center for china and globalization. and a fellow at the ash center of harvard kennedy school and from switzerland, a professor of macroeconomics at the university. a warm welcome to you all and thanks for joining us. andy, let me start with you. the fact that china, the world's second-largest economy is reporting another slump. how concerning is that? >> thank you for having me.

this is an incredibly important western. i think that we should not be concerned at all. let me provide context. we have seen the chinese government win the battle against covid which started with the delta variant which had a reproduction number of about two. the latest variant has something like 16, 8 times as infectious and about as infectious as the measles. fortunately, leslie full. this is come i think we can understand, the rabid relaxation of these very strict covid policies. what this means is that the fundamental conditions are in place for a very powerful economic rebound. not only because we are moving into the post-covid era in

china, but other policy decisions as well around relist it and encouraging consumption beyond just moving past covid. we have seen the political situation move forward as well. all of these elements are in place. that said, the past few months will be very difficult economically. >> if i can follow up, you are talking about the fact china is starting to roll back covid restrictions. obviously this is going to be a delicate transitional time for the economy. china can't really look to other countries as far as what other countries did when they dealt with opening their economies because china's experience is different. you had a zero covid policy implemented for so long and is only now starting to be eased. has there been enough done to really plan on how to navigate this time of great transition?

>> you know, i am not sure how much of a transition israel wired. again, there is risk here. the question mark is, is the latest variant much more mild than people believe? if so, there are many people coming down with covid in beijing and increasingly are cross china today. the latest statistics were more than 50% in beijing have already had covid. if it lasts a week or two, i think people will be moving back to normal and of course there is some psychological hesitation. everyone has developed new habits and muscle memory about behavior, that will take time to change but the sectors that really matter, look at real estate and consumption and

exports. production plays a very important role and government has indicated very clearly that economic growth will be the priority for 2023 and beyond. we see this with local prevention -- provincial governments try during flights around the world to remote business. we may see some direct measures system relating consumption. certainly in monetary policy as well. again, we will probably touch on this, it is very challenging. but i think looking ahead, we can expect a pretty powerful rebound. >> i so you reacting to some of what andy was saying. before you jump in, how bumpy from your perspective will the road ahead be for china when it comes to economic recovery?

>> thank you for having me. you talked about two points. the first is covid. that in itself is really a huge uncertainty. according to china past top geologist, up to 80% to 90% of the population is likely to be infected over the coming months. that means roughly 1.2 billion people potentially being infected by covid. also with the potential of creating new mutations of this virus. now not only does the surge of covid concern china itself, but issues reasonably start to concern the economies of the rest of the world. now when it comes to economic recovery, yes it is going to be bumpy. the question is, how willing the

government is going to be in pumping massive military and fiscal stimulus in order to revitalize the economy? according to the covid pattern, china is somewhere around the latter part of 2020 for the rest of the world. in a way, covid is just starting to spread in china. the bottom line is, massive stimulus will be required and in the coming central economic conference, the understanding is that monetary and fiscal policy will become more expansive and china will stay on chart to focus on economic growth priorities. >> guido, how disappointing or surprising were these latest economic numbers? also, based on what you are hearing, how long is it going to take for china to feel comfortable to start spending money?

>> it has not been surprising. if you consider november, this was the very worst month. not only did we still have the results of the previous restrictions, but protests. the administrative issues on changing stuff not to mention the geopolitical isolation. it was largely predicted. how long it will take depends because china is still vaccinated nearly 90%, but they relied on their own vaccines. there vaccines are much less effective than the western mrna vaccines and the oxford vaccine. also, they hesitated to vaccinate the elderly. so until relatively recently, half of the over 80's in china were not vaccinated. the government has since

determined to vaccinate the elderly more aggressively. however, i am wonder with their absence how protected they will effectively be. so, the presence of reopening will not be so fast. people may have some reason to wait a little bit. that set on the economic point, they basically, their problems are complementary to those of the west. they are the opposite. here we have inflation, there they do not. so, there is plenty of scope for monetary policy to -- the economy there, which is not the case in our economies where there has been perhaps too much stimulus. so, i see a gradual bump against low easing of supply with potentially good sprints and acceleration on demand. >> let's step back and rod or picture.

since the days of communism, china's embrace of capitalism has been spectacular. it has become the world's largest exporter. the latest wto figures show china had experts worth 2.6 trillion dollars in total imports with $2.1 trillion. that gives china a healthy trade surplus of $500 billion. trade is for 30% gdp, vital to the country. china's biggest trading partners the u.s., the eu -- members. electronics and electrical equipment made up around 27% of both imports and exports in 2020 according to the world bank. all eyes now are only annual central economic work conference. that is the meeting in which chinese leaders gather to set up the next year's economic agenda. any indication or idea as to what might come out of that?

>> i have to refocus on economic growth. the key word is "stabilization." stabilizing growth, stabilizing jobs and stabilizing prices. as the professor pointed out correctly, inflation is low in china. that offers a lot of economic leverage for china to revitalize the economy via fiscal and monetary stimulus. were going to see the world's largest economies moving in opposite of monetary and fiscal cycles in the foreseeable future however. as china continues to -- injections fear that it's going to continue to pose some resilience to inflation. particularly, i think policy difficulties to the fed. however, i think trade, as you mentioned, continues to grow. despite 2022 come with a

difficult covid situation. i think china is going to continue to of five for becoming not only the world's largest exporter, but the largest importer. however when it comes to gdp concentration, it is really the mid trade. the mid export that matters. that's trade represents a rather small part of china's gdp today. consumption, culturally, represents about 65% of china's gdp before covid. the real key to revitalization of the chinese economy is going to have to ultimately come from consumption. consumers willing to spend, feeling hopeful about their future and gaining their jobs back. >> do we really understand the fundamentals of how hobbled china's economy has been? do people around the world understand the knock on effect all of this as outside china? >> china -- because in real

terms, despite the you want -- being underpriced, the world bank -- gdp of china adjusted in real terms is about 12% -- 10% higher than that of the united states. you mentioned before in the past, if united states needs the rest of the world to -- now, we have basically two united states. what is china, which is a big -- a bit stronger economically at the moment. it is predicted in 25 years to become much more strong. much stronger. about two thirds stronger than the u.s. the effect of supply or demand reductions in china are immense for the rest of the world. it is still a big importance and it is still important for our products that have their market

because also as was said, domestic consumption is going to rise for ok? the effects of what happens in china are paramount for the rest of the world. >> it looked like you were also reacting to guido. >> i think mohammed committed is certainly amongst the economists , and certainly people that focus on international trade, they certainly recognize the importance of china. what we are seeing is just a greater mainstream awareness of how integral china is to the global economy. there is a lot of talk of global inflation and they think that is exactly right. what surely set, there is a lot of headroom. in fact, what i am hearing in beijing is that in the upcoming year, the plans are to actually have the economy run hotter than normal.

exactly to stimulate growth. this of course can have global implications on raw materials for detriment -- raw materials. inflation from etc. this is, as you said, it used to be the u.s. and the rest of the world catches a cold. we are now and china perhaps regains its economic health moving past covid, that this will certainly have powerful ripple effect around the world. >> also, chinese media have been saying that china has set out plans to expand domestic investment and consumption. what can be done in order to actually make that happen? >> there's a couple of things. one of the main policy priorities that relate to this is the so-called "dual circulation strategy."

one component is domestic, the second is international. the domestic component is to strength and link between many factoring, distribution and consumption. this is something many people outside of china may not appreciate because everyone talks about 1.4 billion people, the biggest market in the world for many products. but in fact, china is a big market but it might not necessarily be strong. meaning that there's still a lot of regional friction. one way, structurally, that the government is looking to his consumption, is by reducing some of these barriers. standardization of rules and regulations across the country. making it so that whether you are a foreign company -- foreign company or domestic company that -- that you can more quickly manufacture and reach consumers. by giving consumers more

choices, that of slaves to greater utility, to use an economic term. but, there's other things the government is doing. >> it looked to be like you were nodding along. did you want to jump in? >> what had he mentioned about consumption is very important. it is important for -- despite being communist, china is one of the most in equal economies. until china develops a robust middle-class, increasing the quality, it will be difficult to rely on domestic consumption. so, your redistribution is fundamental for growth in china. also, something they should watch out anyway is the united states. at the moment, the united states blocked the export of important

other tips. containing critical technology. this could be problematic for china. i think china, if they really want growth in 2023 or more, to become more than -- they should focus on updating their technology. because their technology has been catching up. and to some extent, not respecting intellectual property rights completely. but now they have to do the quality step and become really noteworthy. as we have seen recently from covid, they could not manage to create an effective mrna vaccine, for example. so, there is still some room for improvement. since they have a well-developed workforce and are well coordinated, they should really focus on innovation and technology. >> fears of recession in the u.s. and europe, that has dampened demand for chinese

products for the time being. how likely is it that countries can actually reduce their dependence on china going forward? >> if i may put it the other way around, the key economic priority from the beijing perspective is actually to -- technological self-reliance. personally, china still has quite a few long-term structural economic growth drivers. manufacturing will continue to be china posner growth engine. it has in the sector, particularly manufacturing, has consistently grown faster than the prop -- noun the broader gdp. china today is the world's largest tv manufacturer the largest ev exporter. it has a global dominant position in solar and wind. china is ironically leading global power today in the baltic

and pharmaceutical sectors. all of these higher manufacturing not only gives china a killer economic growth engine, it helps recalibrate some of the imbalances between china pasta mystic economy. today, china is moving a lot of the traditional economy focus to china's west, which is traditionally more backwards and the east coast of element. -- east coast at development, because of the abundant resources. china is moving a lot of big data computing centers to the west to give them an engine for growth in the 21st century. >> andy, they picture. is trying up economy ever going to get back to double digit growth? are they facing a new normal? >> i do not think we will see the days of double digit growth again. just because economies go

through development phases. just like an infant grows very rapidly, when they hit childhood adolescence, the rate of growth slows. i want to go back to something shirley says about the world's dependence on china. certainly as the economy evolves, china's economy evolves, this mix is changing. labor costs have gone up in china. china is looking to move up the value chain. what this means is that a lot of -- that were manufactured and exported in china and exported to the u.s. now are still being made by china but perhaps the actual manufacturing is in southeast asia or mexico. this complicates the picture somewhat. it certainly makes this much more challenging for american policymakers that are looking to prosecute this quite aggressive

series of attacks against china. whether that is technology or trade. this trend toward decoupling. i think there is a lot going on but the double-digit growth days are definitely past, for a number of reasons. another reason, the importance of environmental sustainability. quality growth is the priority now, not just growth for growth site. >> we have run out of time. we will have to leave the conversation there. thank you to our guests. thank you too for watching for you can see the program again any time by visiting our website . for further discussion, go to our facebook page. you can also join the conversation on twitter. for me and the whole team, goodbye for now. ♪

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