Hi, we're here with Carl Tannenbaum, chief economist of Northern Trust. Carl, great to see you.
Good to be with you.
So China recently held a significant congress. What was the occasion?
Every five years, they have a big Communist Party conference. And this was a big coming out party. China has done very, very well. And its President Xi Jinping expressed a wish that China become an even more prominent player on the world stage, laying out the foundation for China's greater participation in world affairs and World Trade. And certainly that was taken very seriously by everybody who listened to him.
So from your perspective, what were the key messages from President Xi?
He laid out a very ambitious plan for China to invest in other countries, in order to help them develop. He laid out some outlines for his own country to try and deal with some of their financial challenges and excesses, and continue their rapid rate of growth. And he really called on others around the world to try and work with China, in order to achieve an outcome that's good for all nations.
So what's at the top of President Xi's agenda?
So certainly a lot of the comments that he made were outward looking. But I think he's going to have to look inward. China has done very, very well as an economy, but their manufacturing sector is growing much more slowly as they lose to their competition who has newer factories and cheaper labor. They're trying to generate more of a service sector, which would help round out their economy and perhaps continue their rate of growth.
Some would say that China has a debt level that is very concerning, so there may be some attention needed to the financial system. And as well I think China is a very diverse country. And so the provinces haven't always agreed with Beijing. And so he's going to have to try and pull that together so it's much better coordinated.
What would you say the outlook is for China's economy?
In his address, President Xi seemed to suggest that he was willing to accept a lower rate of economic growth for more stability. In addition, there have been many more Chinese who are complaining about the impact of heavy manufacturing on the environment. And I think he made a commitment to try and bring that under better control.
And so China is unlikely to continue growing at the lofty rate it has. But it will probably continue to grow faster than most other developed countries. And that will continue to make it wealthier and wealthier, and may allow it to pursue its lofty global ambitions.
Carl, thanks as always for your perspective.