The Hong Kong observation wheel and the HSBC building in Victoria Harbour in Hong Kong.
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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 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.
Speaking to CNBC’s Karen Tso on Wednesday, HSBC CFO Georges Elhedery said the lender — which is headquartered in London but does a lot of its business in Hong Kong and across Asia-Pacific — was confident that the world’s second-largest economy would overcome its short-term headwinds.
“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.
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.”
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.
“That transition will mean that China will avoid falling in this middle income trap and be able to continue the growth pattern,” he added.
“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-long term for China.”
The more immediate economic challenges may last “a few quarters to a couple of years,” Elhedery said, but expressed confidence…
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