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Under the Banyan Tree - Asia: what to watch in 2025
64 Plays5 months ago
Fred Neumann and Herald van der Linde return to the studio for a rundown of the must-watch markets and economies across Asia in 2025. Disclaimer: https://www.research.hsbc.com/R/101/Hql6Cl7. Stay connected and access free to view reports and videos from HSBC Global Research follow us on LinkedIn https://www.linkedin.com/feed/hashtag/hsbcresearch/ or click here: https://www.gbm.hsbc.com/insights/global-research.
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Transcript
Introduction and Series Overview
00:00:02
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:13
Speaker
Make sure you're subscribed to stay up to date with new episodes.
00:00:16
Speaker
Thanks for listening.
00:00:17
Speaker
And now onto today's show.
00:00:24
Speaker
This is a podcast from HSBC Global Research, available on Apple Podcasts and
Expert Panel Introduction: Fred Newman and Harold Vindelinde
00:00:29
Speaker
Spotify.
00:00:29
Speaker
However you're listening, analyst notifications, disclosures and disclaimers must be viewed on the link attached to your media player.
00:00:45
Speaker
Hello and Happy New Year from Hong Kong.
00:00:47
Speaker
I'm Fred Newman, Chief Asia Economist here at HSBC.
00:00:50
Speaker
And I'm Harold Vindelinde, Head of Asian Equity Strategy at exactly
2025 Economic Outlook in Asia
00:00:54
Speaker
the same bank.
00:00:54
Speaker
You're listening to Under the Banyan Tree, where we put Asian markets and economics in context.
00:01:00
Speaker
It's a new year and we're kicking off 2025 with a roundup of everything you need to keep an eye on here in Asia for the year ahead.
00:01:07
Speaker
Looking forward to it.
00:01:08
Speaker
From HSBC Global Research, this is Under the Banyan Tree.
Impact of US-China Relations under Trump
00:01:24
Speaker
So, Fred, here we are in the New York calendar year 2025.
00:01:29
Speaker
Sounds almost futuristic for me.
00:01:31
Speaker
I had to make drawings at school.
00:01:32
Speaker
You probably did it as well.
00:01:33
Speaker
Yeah, I thought we had flying cars by now.
00:01:35
Speaker
What happened?
00:01:36
Speaker
What happened?
00:01:37
Speaker
This is it.
00:01:37
Speaker
I'm still driving.
00:01:38
Speaker
Well, there are flying cars.
00:01:39
Speaker
Aren't they doing delivery services in certain places?
00:01:42
Speaker
Yes, but I think, you know, it's not the flying car you and I dreamed of when we grew up.
00:01:46
Speaker
That was actually 2000.
00:01:47
Speaker
You had to make a picture of how the world would look like in 2000.
00:01:50
Speaker
So we're 25 years late on that flying car.
00:01:54
Speaker
But there's got to be quite a momentous year.
00:01:57
Speaker
Every year is, of course, important.
00:01:58
Speaker
But this year we have a new U.S. president coming in.
00:02:01
Speaker
So the relationship between the U.S. and China will somehow evolve this year.
00:02:06
Speaker
I believe Mr. Trump will be installed as the new president on the 20th of January.
00:02:10
Speaker
So the 21st of January, big tariffs on trade.
00:02:13
Speaker
Strictly speaking, he will become the new president around noon on the 20th.
00:02:17
Speaker
And so he's reportedly already promised some executive action within a few hours of being in office.
00:02:24
Speaker
So we'll see.
00:02:26
Speaker
I think it's no exaggeration to say that this year will partly be dominated in economic terms by what the new administration will decide.
00:02:36
Speaker
Having said that, there are really two components.
00:02:39
Speaker
One is domestic policy in the US and the other one is international policy.
00:02:43
Speaker
And of course, domestic policy has only an indirect impact on Asia.
00:02:48
Speaker
It's the international policy, the terror stuff.
00:02:51
Speaker
which is going to have a direct impact on this region in particular.
00:02:56
Speaker
Now, we have seen this obviously during the first Trump administration, already heightened tariff and trade tensions.
00:03:03
Speaker
We saw significantly supply chain rejigging on the back of this, changes of FDI flows, for example.
00:03:11
Speaker
But the region still managed to continue to grow.
00:03:14
Speaker
Our question is, is this going to be
00:03:17
Speaker
further kind of higher impact event, if you will.
Effects of Tariffs on China's Economy
00:03:21
Speaker
So – but let me ask you, Harold.
00:03:23
Speaker
We talk a lot about tariffs and the impact on trade.
00:03:27
Speaker
And we can talk more about this on what it means in economics terms.
00:03:30
Speaker
But in terms of financial markets, equity markets in particular, how important actually is the tariff story?
00:03:37
Speaker
Yeah.
00:03:37
Speaker
Yeah, it's important and it's not important.
00:03:40
Speaker
That sounds like a way of getting out of this question, but it is not important if you look at the numbers.
00:03:46
Speaker
So about 1% to 2% of the actual earnings of the listed companies in China is generated from exports to the US.
00:03:57
Speaker
So you put a 50% tariff on that, let's say it's 2%, you put a 50% tariff on that, you assume in a worst case scenario that the Chinese have to pay for that,
00:04:06
Speaker
which by the way in the past wasn't the case, that means you have a 1% impact on earnings.
00:04:11
Speaker
That is not a lot.
00:04:13
Speaker
So in that sense, it is not a big equity story.
00:04:17
Speaker
It's probably a bigger economic story.
00:04:20
Speaker
And this is maybe my question to you.
00:04:21
Speaker
What is that economic story?
00:04:23
Speaker
Because the impact on the equities will probably more come through second round effects.
00:04:29
Speaker
supply chain reshuffle that of course continues and that impacts other markets but also maybe the way the renminbi is being managed in China or whatever they do on their own sort of growth so I'm actually posing you the question again how do you think China will respond to this from an economic point of view?
China's Economic Response to US Tariffs
00:04:45
Speaker
Well, if you talk about the economic impact, it's obviously the wide range of outcomes that we could use.
00:04:53
Speaker
Famously in a campaign trail, Donald Trump suggested that the US might impose an additional 60% tariff on imports from China.
00:05:03
Speaker
If that really came to pass, that could knock back GDP growth in China by about one and a half to two percentage points, which is quite significant, right?
00:05:14
Speaker
Now, that, though, suggests, A, that these tariffs come in immediately and automatically.
00:05:19
Speaker
all goods, which isn't quite likely, might be more staggered.
00:05:23
Speaker
The other thing is that really the Chinese can offset the impact to some extent because they could bring in stimulus that kind of offsets that.
00:05:32
Speaker
So the net impact is not necessarily going to be that large.
00:05:36
Speaker
It might be half a percentage point or so.
00:05:38
Speaker
But we've seen that the Chinese have put some stimulus in place already, at least over the last, I would actually say since the summer.
00:05:45
Speaker
They've come up with rules on the property market.
00:05:48
Speaker
They've come on rules with government financing and local government financing issues.
00:05:53
Speaker
So it looks like they've done a lot of stimulus already.
00:05:55
Speaker
Do you think there's much more room for them to do that?
00:05:58
Speaker
So there's probably much more room to actually pump money into the economy.
00:06:02
Speaker
So far, it's been changes to rules, regulations, a bit of monetary easing, a lot of plans, but not necessarily new money being put into the economy, at least on a larger scale.
00:06:14
Speaker
That might happen this year, particularly if the US does come in with higher tariffs because that would raise a pressure on the Chinese government to actually then
00:06:24
Speaker
stimulate the economy.
00:06:25
Speaker
So there's this theory out there that maybe the Chinese are waiting a little bit to see what happens.
China's Equity Market Reactions
00:06:31
Speaker
In fact, everybody is waiting.
00:06:32
Speaker
You and I are waiting.
00:06:33
Speaker
Yeah, exactly.
00:06:33
Speaker
Nobody knows what it is.
00:06:34
Speaker
We don't know.
00:06:35
Speaker
So that's a fair approach.
00:06:37
Speaker
And so we might actually not just get clarity on –
00:06:41
Speaker
the tariffs and tariff strategy in the coming weeks by the US, but we also concurrently might get more clarity on the Chinese stimulus policies in response to them because one is a little bit affected by the other.
00:06:54
Speaker
Now, when you look at financial markets, though, equity markets in particular, is there a sense that maybe a big stimulus is needed to revive the economy?
00:07:03
Speaker
Investors waiting for that stimulus or is it kind of, well, you know, stimulus come or may not come.
00:07:09
Speaker
It's really about
00:07:11
Speaker
fundamentals.
00:07:13
Speaker
How is the expectation in the market?
00:07:15
Speaker
The word I would use here is confidence.
00:07:17
Speaker
So we've had over the last years multiple times and multiple announcements with regards to stimulus and the market has responded to that.
00:07:25
Speaker
That's all nice and well.
00:07:27
Speaker
But just having one big stimulus is probably going to help the market, but only in the very near term.
00:07:33
Speaker
What we need to see is that the kind of a lot of the industries, the companies that are listed, the industries aren't just in a very bad shape.
00:07:42
Speaker
There's too much produced or competition is too high, demand is too weak or you name it, right?
00:07:48
Speaker
And we need to have those industries work through that.
00:07:51
Speaker
We see this in certain industries, companies.
00:07:53
Speaker
real estate, for example.
00:07:54
Speaker
The story in real estate now is so much different than it was, say, one and a half, two years ago.
00:07:59
Speaker
Things are – improving is not maybe the right word, but things are getting on the margin a little bit better.
00:08:06
Speaker
And two years ago, it was all about prices and nobody wanted to buy something, et cetera.
00:08:09
Speaker
It's interesting you say that.
00:08:10
Speaker
Is then – we always talk about, oh, trade tensions with the US and
00:08:16
Speaker
There's a housing bust in China which might be holding back maybe confidence.
00:08:21
Speaker
But is it fair to say that maybe there's another cycle going on in China, like a Schumpeterian cycle to bring in Schumpeter, the famous economist, who says there are cycles of creative destruction where really industries need to restructure, where excess capacity needs to come out.
00:08:39
Speaker
Some players need to exit.
00:08:40
Speaker
There needs to be consolidation.
00:08:42
Speaker
And then –
00:08:43
Speaker
things kind of revive again.
00:08:45
Speaker
Is that kind of what you're getting at here?
00:08:47
Speaker
Yeah.
00:08:47
Speaker
No, I think Shunbita was 1950s or so.
00:08:49
Speaker
But that 1950s… And he didn't cover China, we should say.
00:08:52
Speaker
No, no.
00:08:52
Speaker
He didn't look at stock markets in China either.
00:08:54
Speaker
They were actually close to that time anyway.
00:08:56
Speaker
But I think you're absolutely right.
00:08:59
Speaker
What we need to see in China from an equities point of view…
00:09:03
Speaker
is that we deal with some of the problems that we have.
00:09:07
Speaker
And that is a destructive process.
00:09:09
Speaker
As we've seen in real estate, that means that certain companies need to be closed down.
00:09:14
Speaker
And that has happened.
00:09:16
Speaker
What we see in electric vehicles is that certain companies need to be closed down.
00:09:20
Speaker
And that is going to be a very painful process for the ones that do close down.
00:09:25
Speaker
But the funds who survive, it gives them opportunities to gain market share, to grow, reinvest in their businesses, etc.
00:09:33
Speaker
And we see this happening in a few industries.
00:09:36
Speaker
We see this in parts of healthcare, travel, real estate, EV.
00:09:40
Speaker
There's a few other industries as well.
00:09:42
Speaker
So I think that's a very nice comparison that you make, a Schumpeterian sort of cycle.
00:09:47
Speaker
But that's a slow cycle.
00:09:49
Speaker
But it could mean that, for example, the story on equities in 2025 for China is slightly different than the economic story.
00:09:57
Speaker
You're talking about stimulus and tariffs.
00:09:59
Speaker
We might be talking about, yeah, okay, that's all not so good.
00:10:01
Speaker
But actually, there are benefits coming through from that consolidation that we see in industries.
00:10:07
Speaker
And I suspect actually in 2025, we're going to see the early benefits of that start to come through in actual numbers of companies.
00:10:13
Speaker
Yes.
00:10:14
Speaker
Which technically means that profit growth could be faster than GDP growth.
00:10:19
Speaker
We always tend to think that profit growth is related to GDP growth, but really in reality can be slower or faster depending on the cycle because the profit cycle is not perfectly matched with the GDP cycle, right?
00:10:33
Speaker
Absolutely.
00:10:33
Speaker
And this is, I think, why you have a job, Harold.
00:10:37
Speaker
Absolutely.
00:10:37
Speaker
And I actually tell people do not listen to economists because… And I tell them they don't listen to strategists.
00:10:43
Speaker
So we were both on the same page.
00:10:45
Speaker
Because the story is that we need to understand what you guys say, of course, but we need to make also a distinction what that means for the listed companies.
00:10:53
Speaker
Profit growth tends to be faster than economic growth because economic growth is kind of sales.
00:10:57
Speaker
But if you have margin expansion, these sort of things, the profits can go faster.
00:11:02
Speaker
But in particular, in this case, there will be companies whose margins are now 2% or 3%, hardly making any money on the product they sell.
00:11:09
Speaker
But if their competitors are leaving, in about a year's time, their margins might go to 4% or 5% or 6% or 7%, maybe even higher.
00:11:17
Speaker
And that means that suddenly the profit growth is going to be much faster, despite the fact that they might not be selling that much more.
00:11:22
Speaker
But it's just because they have pricing power coming back.
00:11:25
Speaker
So there is this big distinction between economic growth and earnings growth.
00:11:29
Speaker
And in China, I think we're going to see that becoming a bigger story over the next one.
00:11:34
Speaker
So that might actually mean that all the other noise, trade tension, stimulus, et cetera, is...
00:11:39
Speaker
part of the story but there's an underlying cycle.
India's Economic Prospects and Investor Influence
00:11:43
Speaker
You mentioned this consolidation, profit growth, independent cycle.
00:11:48
Speaker
Does that apply to Japan as well because we read a lot about the Japanese market being backed.
00:11:55
Speaker
you know, in terms of investor attention.
00:11:59
Speaker
And we've seen consolidation there coming through as well, haven't we?
00:12:04
Speaker
Yeah, there's actually consolidation not only in China but in many other industries as well.
00:12:08
Speaker
I mean, actually, a nice example of this in North Asia is actually, for example, DRAM and tech and these sort of things.
00:12:15
Speaker
Ten years ago, there were many producers...
00:12:18
Speaker
But it became so unprofitable to do so that now we have a few big producers who make this in Korea, for example, in the DRAM space.
00:12:26
Speaker
They're two large producers.
00:12:28
Speaker
So we've seen this in Japan as well.
00:12:30
Speaker
In Japan, of course, it's also how then companies make the next step in terms of corporate governance.
00:12:36
Speaker
Do they then share these benefits with themselves, with the
00:12:40
Speaker
the companies in their group, or do they share that with minority shareholders?
00:12:44
Speaker
And we see increasingly that that's exactly what they're doing.
00:12:47
Speaker
They're paying dividends.
00:12:48
Speaker
They're doing share buybacks and these sort of things.
00:12:49
Speaker
So you and I, as small investors, we benefit from that.
00:12:53
Speaker
Absolutely.
00:12:53
Speaker
Harold, every time I talk to you, I learn that it's not just about economics.
00:12:56
Speaker
There are other things that are apparently important as well in financial markets.
00:13:00
Speaker
But maybe this is a great time to take a quick break.
00:13:03
Speaker
And when we come back, we should also look at some of the other markets in Asia and how they –
00:13:09
Speaker
you know, what the outlook is in this topsy-turvy world we're in as we head into 2025.
00:13:14
Speaker
Good idea.
00:13:25
Speaker
Welcome back, everybody.
00:13:27
Speaker
We're here with Harold van der Linde and myself talking about 2025, and we can't believe it's already 2025.
00:13:33
Speaker
That's a bit of a cliche to say this, but then again...
00:13:37
Speaker
It came up very early.
00:13:39
Speaker
As you get older, it just happens faster and faster.
00:13:41
Speaker
Now, we talked about China.
00:13:43
Speaker
We talked about trade tensions with the US, Japan.
00:13:48
Speaker
One market we haven't talked about is India.
00:13:51
Speaker
And India is interesting because, of course, it is a giant economy.
00:13:55
Speaker
It's done very well in recent few years but it kind of started to lose its mojo a little bit in the second half of last year, at least in economic terms.
00:14:04
Speaker
It slowed down at the margin.
00:14:06
Speaker
A bit of food inflation is starting to fade as well.
00:14:09
Speaker
Central Bank can't really cut rates that quickly as it maybe would like to because there's still sticky inflation.
00:14:16
Speaker
So there's a sense that actually growth is kind of normalizing.
00:14:20
Speaker
So it was –
00:14:21
Speaker
You know, back to trend.
00:14:22
Speaker
It was for a couple of years a much, much stronger growth.
00:14:27
Speaker
But it's kind of coming back to earth a little bit.
00:14:30
Speaker
Now, that's at least from an economic perspective looks like what's going to happen in 2025 as well more or less.
00:14:37
Speaker
Not a terrible performance but – No, but still pretty decent growth rates.
00:14:40
Speaker
Still decent.
00:14:41
Speaker
It just comes from a hell of us.
00:14:42
Speaker
Here's a question for you.
00:14:45
Speaker
Equity markets have been red hot, right, for a while there in India.
00:14:50
Speaker
Is it sort of that gone out?
00:14:53
Speaker
This is one of the problems, actually, at least for the companies that we look at.
00:14:56
Speaker
So you've got an economic environment whereby things are normalizing.
00:15:00
Speaker
Okay, that's nice and well.
00:15:01
Speaker
But what we've also seen is that so many people are putting money into the stock market that banks, in order to get capital, to get money in, to lend it out to companies, had to raise their deposit rates or be creative.
00:15:17
Speaker
Because everybody said, why would I put my money in a bank if I only get 5% but I am guaranteed, that's how the retail story is,
00:15:26
Speaker
guaranteed my head was 25%.
00:15:27
Speaker
You're talking about local investors, right?
00:15:30
Speaker
I'm talking about local investors.
00:15:31
Speaker
Because international investors have become a bit – They pulled money out.
00:15:33
Speaker
They pulled money out.
00:15:34
Speaker
They were a bit more cautious on India, right?
00:15:36
Speaker
After being very, very enthusiastic for a while, they've pulled back.
00:15:40
Speaker
Yeah.
00:15:40
Speaker
And that is partially because India is still shining bright, but the light is a little bit less.
00:15:46
Speaker
So, things are normalizing.
00:15:48
Speaker
Partially also because all of the attention of the local investors went to the mid-cap companies and the
00:15:54
Speaker
The foreign investors typically play in the larger names and they haven't performed as well.
00:15:58
Speaker
Those were the banks that, for example, saw their margin squeeze as they struggled to get money.
00:16:02
Speaker
And partially because suddenly China, the story in China has changed.
00:16:05
Speaker
I was going to ask you because, you know, truth be told, every three years or so I learn something from you.
00:16:12
Speaker
You once told me.
00:16:13
Speaker
I'm not quite sure what you were in three years, but okay.
00:16:17
Speaker
You once told me that really if you think about equity capital in Asia,
00:16:21
Speaker
It's really a giant – emerging Asia, we should say.
00:16:24
Speaker
There's a giant pendulum, if you will.
00:16:27
Speaker
You get the Indian market very big, the Chinese market very big.
00:16:31
Speaker
And there was a sense that when the Chinese market didn't do well, that money kind of flowed into the other big market, which is India.
00:16:39
Speaker
Is there now a sucking sound that if really things look better in China –
00:16:43
Speaker
still to be determined by the way, but if that happens, that actually then people could take more money out of India.
00:16:49
Speaker
Is that still apply or can both markets actually receive capital?
00:16:53
Speaker
Both markets can receive capital, but then we need to get money coming from the rest of the world to Asia.
00:16:59
Speaker
And that is a story of how attractive it is to put money into the US and that's a bond yield story and these sort of things, a dollar story.
00:17:06
Speaker
But taking that aside, the money normally then gets reallocated within Asia.
00:17:10
Speaker
And yeah, China just started to look a little bit better when India was normalizing, using the word normalizing because it's still growing as fast as China on earnings.
00:17:19
Speaker
But the big risk really is that the local investor, which had been so enthusiastic investing in Indian markets, is...
00:17:27
Speaker
If they start to lose their appetite, some of that is kind of continuing.
00:17:31
Speaker
They have saving plans every month, so people don't close that.
00:17:34
Speaker
They will continue.
00:17:35
Speaker
But the additional money that came into the market was very often people just saying, oh, I'm going to make money in the equity markets I want to be in.
00:17:41
Speaker
Everybody, all my friends are in.
00:17:43
Speaker
If that changes, then suddenly the whole dynamics in that market change.
00:17:47
Speaker
It's interesting also because from an economic perspective, we tend to think of India as being less exposed to global trends.
Southeast Asia's Trade Exposure and Policy Responses
00:17:56
Speaker
So US-China trade tensions doesn't impact India as much.
00:18:00
Speaker
It's mostly a domestically driven economy.
00:18:02
Speaker
Apart from oil prices matter a lot for India.
00:18:05
Speaker
But what you're saying is that actually to some extent economically, India may be a bit more insulated from these global trends.
00:18:13
Speaker
But from a financial market perspective, there is a sensitivity there that if China did really, really well, maybe that would come at the expense of the Indian stock market.
00:18:23
Speaker
Yeah, and that might have other consequences if that were to be the case.
00:18:28
Speaker
That's absolutely right.
00:18:30
Speaker
And those are the big markets, so they are dependent on each other.
00:18:33
Speaker
Although the economic connections are not always directly visible.
00:18:36
Speaker
It's just because if you've got a billion dollars to invest, there's only so many markets you can go to in Asia.
00:18:42
Speaker
That's right.
00:18:43
Speaker
Now, where the economic connections are very visible is actually in Southeast Asia, right?
00:18:48
Speaker
So we're talking about Vietnam.
00:18:49
Speaker
We're talking about Malaysia, Thailand, Singapore, Indonesia, and the Philippines.
00:18:54
Speaker
And there we've seen, though, there's an interesting dynamic that I think matters for 2025.
00:19:00
Speaker
These are very open economies.
00:19:02
Speaker
So, I think it's very trade exposed, maybe Indonesia, Philippines less so, but generally quite trade exposed, where US-China trade tensions could actually have an impact on their growth as well.
00:19:15
Speaker
It could be positive or it could be negative.
00:19:17
Speaker
And so, the risk that from a financial market perspective going to this year is actually quite large for these markets or at least the uncertainty is quite high because we don't know exactly how
00:19:30
Speaker
US-China trade tensions will play out.
00:19:33
Speaker
Absolutely right.
00:19:33
Speaker
And I have a question for you here.
00:19:35
Speaker
So first of all, these markets, because they're smaller, they are more sensitive to global flows in general.
00:19:42
Speaker
So if global flows are being dictated, let's say, by US bond yields, if that's the benchmark, they are more sensitive to that for the very simple reason that they don't have enough money domestically to invest.
00:19:53
Speaker
So they're dependent on foreign capital.
00:19:56
Speaker
And then the question really is in how far can these countries, and this is my question to you, put policies in place so that they actually become either less dependent on trade or benefit from these shifts in supply chains.
00:20:10
Speaker
And it looks to me certain countries seem to be more active in this than others.
00:20:15
Speaker
Is that fair to say?
00:20:16
Speaker
Yeah, it's quite complex, right?
00:20:18
Speaker
You want to have good infrastructure to attract companies to manufacture in your economy.
00:20:23
Speaker
So there's been a lot of emphasis on infrastructure, particularly trade infrastructure, ports, connectivity that helped economies like Vietnam, for example, like Malaysia to attract more investment, therefore trade.
00:20:38
Speaker
But there's also this other school of thought that says actually –
00:20:42
Speaker
Because the trade environment is so uncertain, you also want to develop a second leg to stand on, which is a domestic economy.
00:20:50
Speaker
And so how do you get that going?
00:20:52
Speaker
Well, that is just to your homework, right?
00:20:55
Speaker
Do domestic infrastructure, investment education, social services, better governance standards, education.
00:21:04
Speaker
and so forth.
00:21:05
Speaker
And there obviously there's some differences within Southeast Asia, right, that we see across many emerging market economies.
00:21:14
Speaker
But by and large, Southeast Asia has done quite well.
00:21:18
Speaker
One economy stands out actually with having had that step change in that kind of domestic growth potential is the Philippines.
00:21:26
Speaker
where you've seen much smaller budget deficits and much bigger allocation to infrastructure investment, which helps growth then.
00:21:37
Speaker
And so you really see that being reflected, therefore, in a higher trend growth rate.
00:21:43
Speaker
And in fact, arguably, the Philippines has now, with Vietnam, probably the highest trend growth rate in Southeast Asia.
00:21:50
Speaker
It's often not talked about.
00:21:52
Speaker
Everybody talks about Vietnam and so forth.
00:21:54
Speaker
But the Philippines has sort of quietly come up there
00:21:56
Speaker
It is interesting because I know that the new Indonesian president wants to do this as well.
00:22:02
Speaker
So he's actively talking, I want much higher GDP growth rates.
00:22:05
Speaker
Now, if they're going to put the policies in place to get there is a question that we'll have to answer in 2025 as well.
00:22:12
Speaker
But you can see within the region that this is possible.
00:22:14
Speaker
Absolutely right.
00:22:15
Speaker
Yeah.
00:22:16
Speaker
And I guess for Indonesia, the advantage is they're not as exposed to US-China trade tensions.
00:22:21
Speaker
But if they want to raise the growth potential, they still need to have the right domestic policies.
00:22:27
Speaker
And of course, we'll see whether no president is able to enact these reforms that are needed.
00:22:32
Speaker
So, Harold, big tour around the region.
00:22:35
Speaker
We could obviously talk much longer than that.
00:22:37
Speaker
You're a strategist.
00:22:37
Speaker
I'm an economist.
00:22:38
Speaker
We could talk for hours and never reach a conclusion.
00:22:40
Speaker
But maybe, you know, for the sake of the audience, we'll just cut it here.
00:22:44
Speaker
I'm sure many of these themes we will revisit over the course of this year.
00:22:49
Speaker
And, you know, the risk is that obviously some of the conclusions we drew today are already obsolete by next week.
00:22:55
Speaker
That might well be.
00:22:56
Speaker
Let's see what happens over the next couple of weeks.
00:22:58
Speaker
Which is one reason actually why listeners should subscribe to this podcast because things change every single week.
00:23:04
Speaker
Absolutely.
00:23:04
Speaker
That's a fantastic note to finish on.
00:23:07
Speaker
Thank you very much, Fred.
00:23:08
Speaker
Thank you.
00:23:09
Speaker
That's a wrap, folks.
00:23:10
Speaker
Thank you for joining us on our first podcast for 2025.
00:23:13
Speaker
It's been great having you with us.
00:23:17
Speaker
Indeed, and there'll be many more to come.
00:23:19
Speaker
Make sure you join us and also give our sister podcast, The Macrobrief, a listen for your weekly global economics fix.
00:23:26
Speaker
We'll be back same time next Thursday.
00:23:28
Speaker
Talk to you then.
00:24:02
Speaker
Thank you for joining us at HSBC Global Viewpoint.
00:24:06
Speaker
We hope you enjoyed the discussion.
00:24:08
Speaker
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