Growth in China has been weighed down over the past year by a slump in the country’s traditional economic pillars of real estate, infrastructure and exports. This prompted Beijing to ramp up its efforts to bolster manufacturing and domestic tech in a bid to modernize its economy and remain globally competitive.<\/p>\n

Speaking to CNBC’s Karen Tso on Wednesday, HSBC CFO Georges Elhedery said the lender \u2014 which is headquartered in London but does a lot of its business in Hong Kong and across the Asia-Pacific \u2014 was confident that the world’s second-largest economy would overcome its short-term headwinds.<\/p>\n

“We’re looking at major economic transition, which is taking place, which gives us very strong grounds to be very positive about the medium- and long-term outlook,” Elhedery said.<\/p>\n

He suggested that China’s economic maturity has reached such a stage that now is the “right time to transition into what more mature economies are.”<\/p>\n

Elhedery characterized this maturity as being more heavily reliant on consumers, the services industry and high-value and sustainability-driven products, such as electric vehicles and batteries, aspirations he said were evidenced by the Chinese government’s recent massive push toward these sectors.<\/p>\n<\/div>\n

$\"Very$ <\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

“That transition will mean that China will avoid falling in this middle income trap and be able to continue the growth pattern,” he added.<\/p>\n

“Some of the Western economies have gone through those transitions in the past, [and] China is going through a transition today. That gives us a lot of positive outlook for the medium- to long-term for China.”<\/p>\n

The more immediate economic challenges may last “a few quarters to a couple of years,” Elhedery said, but expressed confidence that China will be in a better position for the long run, as the country puts itself on a “materially better forward-looking track.”<\/p>\n

HSBC missed its full-year 2023 pretax profit forecasts on the back of a $3 billion write-down on its 19% stake in China’s Bank of Communications, while the lender cut its overall exposure to Chinese commercial real estate by $4.6 billion year on year.<\/p>\n

Yet, Elhedery on Thursday insisted that most of the challenges related to the ailing Chinese property market were “behind us,” even as he said the sector is not “out of the woods” so far.<\/p>\n

“We think the trough of that sector is behind us. We think in our case, our exposure and our ECL (expected credit losses) covers the bulk of the charges behind us, but that still means there will be lingering effects as the sector continues to adjust, and we may continue to see some impact but not to the tune that we’ve seen last year on our credit charges,” he said.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Hong Kong observation wheel and the HSBC building in Victoria Harbour in Hong Kong. Ucg | Universal Images Group | Getty Images HSBC is “very positive” about the mid- to long-term outlook for the Chinese economy despite current headwinds, the British bank’s chief financial officer told CNBC. Growth in China has been weighed down<\/p>\n","protected":false},"author":2,"featured_media":46303,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/posts\/46302"}],"collection":[{"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/comments?post=46302"}],"version-history":[{"count":0,"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/posts\/46302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/media\/46303"}],"wp:attachment":[{"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/media?parent=46302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/categories?post=46302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/manitimes.com\/wp-json\/wp\/v2\/tags?post=46302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}