such a critical time for the chinese economy and of course by extension the global economy my question really is i understand they probably didnt have a choice but to exit covid zero but to exit in such a chaotic and haphazard manner resists going to at least in the short term potentially do even more economic damage yeah absolutely will and absolutely has you know when you look at china beige books latest q4 numbers i mean its an absolute bloodbath out there every sector is struggling you know every headline growth metric profitability sales production everything is struggling i mean the picture is very very grim and we know why this is you know you had two months where you just had restrictions which were constricting economic activity and then of course you go from zero covid to perhaps total covid edit just unleashes all sorts of problems which is again really damage the economy and i dont think the bottom is in sight as yet one of the wildcards for the global inflation outlook uncertainly for potentially throwing a spanner into what even the fed does is if were going to say theres great inflationary wave coming from china do you see it that way some of the estimates that bloomberg economics has when it comes to energy prices as well as even us cpi being impacted by this are significant know right now the core problem in china this year has been deflation right prices falling price weakness thats a real challenge were dealing with now and that is probably the long term trajectory of the economy anyway as it continues to slow now you may as we get into next year and you see economic activity finally rebound you see those prices rise and you may perhaps start to see some levels of inflation pick up in china which actually has serious ramifications for global inflation and what the fed does the long term trajectory though at this point doesnt look like of china being that actually an inflation exporter that that folks always thought it would be but then im taking a you know high frequency data you know like mobility for example and you know theres some cities like beijing and tianjin guangdong are saying that theyve reached their covid peaks ready and theyre starting to see mobility pick up a little bit its better to focus on that data than maybe some of the sentiment data that were getting out here as well are we underestimating just how big a recovery boost and how soon it could actually happen look i think we have to talk about the country as a whole because you could see certain cities reached their covid peaks but its in china between the massive country that it is you still got you know over a billion people elsewhere who you have to think about and that has very very serious economic repercussions both from the consumption side both when you talk about the property market even if youre not strictly focused on sort of these richer coastal provinces which tend to get a lot more and sometimes disproportionate attention and the economic conversation in china so would you say that its safe to say that you know we could see when it comes to forecasts more downgrades for 2022 and then maybe a little bit more upside risk for 2023 in terms of growth yeah exactly look i think the next several weeks the next month or so is going to be very very tough you know in an ideal world you find the bottom somewhere around you know february perhaps maybe january and then you start to talk about the recovery story into china and you get into q2 and you start to see a real recovery so that bull case that a lot of the markets are waiting for you start to see it gain some traction that is very much still still a q2 story not a q1 story in our view what is the long term debt picture looks like well we know that its not pretty when it comes to local governments and how theyve had to fund covid 0 if we see more fiscal measures this year do we get run into that problem with the productivity of debt in china yeah and thats the real question right so what is the nature of fiscal activity that you get and its been oftentimes redefined in china were used to thinking of you know highways and bridges and all of that being fiscal activity and its increasingly been talked about in terms of development of the logical sector r and d and that sort of thing so so there is room for fiscal stimulus this this year theres room clearly for for more monetary policy easing theres no question about that i think we just have to see what form it takes while keeping in mind that the returns on that are not going to be like years past the growth levels are just not going to be there including of course in property the other long term picture youve sort of alluded to a lot of the that the drags property infrastructure and demographics not the least of which we need to look at that but the geopolitical overlay the decoupling in tech particularly when we talk about chips how much is that going to curtail not just the leaderships ambitions but the ability to move the chinese economy and industry to the next level yeah i think in the short term thats obviously a pretty major setback and of course as us policy if us policy continues to evolve in that direction and you see more and more technological decoupling its most certainly going to up and up and beijings plans and the leaderships plans for where they thought technologically the economy could evolve to because of their access to us high end technological inputs and parts and so forth that said i think it will also probably be a precursor off of the communist party looking for other mechanisms to obtain those high end technologies right because there there is a national agenda there and it wants it certainly wont be abandoned even if it is in the short run i sort of delayed i was going to ask about just the export picture doesnt look too good either right but when youre talking about sharp slowdowns in the us and the eu can china really rely on its domestic growth to sustain you know where it where gdp is going to go are we really going to hit that 5 percent quite easily you think so you know 2023 easy comps you know 2022 being as poor as it was you know were were thinking its about 2 percent growth so so you can get some of that those numbers he can juice them for sure but the reality is that were looking at a chinese economy thats recovering you know this year amidst a global slowdown the exports numbers here theyve been lackluster and now theyre falling and so i think its going to absolutely i think put a put a ceiling on how much of a recovery you can get because of course exports drive a lot of it and domestic consumption has not been a sustainable driver of chinese economic growth for years