December 20, 2024 • 7 mins
China has been desperate to boost its economy but the consumer does not want to spend.
Youth unemployment is close to 20% in the country, which is a contributor factor as well as worries around healthcare.
The South Korean Government has voted to impeach President Yoon and now the constitutional court has 180 days to review that decision.
There is a potential for a merger between two car makers Nissan and Honda.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Cry and Bridge, right, we're going to pay the Lewis
Asia Business correspondent who's with us paid.
Speaker 2 (00:04):
A good evening, Good evening, Ryan.
Speaker 1 (00:07):
China has been desperate to boost its economy, retail sales
of mess, the expectations and November.
Speaker 2 (00:13):
Yeah, this has been the big theme really of twenty
twenty four in China. The consumer just does not want
to spend, and unlike in other Western economies where consumption
can be as much as three quarters of the economy,
in China it really is lagging behind. So China, which
(00:33):
has been relying on exports to try and boost its economy,
that's a pillar that is not going to be able
to rely on next year, really needs to get consumption going.
One of the reasons why it can't despite all the
stimulus measures that it's announced, is because it hasn't really
done anything to expand the social safety net. In China.
(00:55):
People are worried about their jobs. Youth unemployment is close
to twenty percent, so very high. People are worried about
things like healthcare, which they after the pandemic, many people
realize that so you know, they were going to have
to pay for their own health care. So people are
saving for these unforeseen circumstances rather than spending, and that's
(01:16):
been a real drag on the economy. So China's come
up with all sorts of measures to try and address this,
but nothing is really really working. President Ejinping has said
this will be the number one economic priority next year
to boost consumer demand. But the question on everyone's lips
is how what is actually you're going to do to
(01:39):
do this, And we haven't seen any details of any
policies yet.
Speaker 1 (01:42):
No when are we going to see details? Do we
have any indication of when they might come, and if so,
how significant they might be.
Speaker 2 (01:50):
Well, the China has what's known as its Two Sessions,
which is its major parliamentary meeting in March, and that's
when traditionally you get details. For example, it's economic growth targets,
which last year this year was five percent. The rumors
are it's going to stick with that five percent growth
target this year as well that the markets are getting very,
(02:11):
very jittery. They just can't wait that long. And one
of the problems we've had this year is we've had
a lot of press conferences from ministry officials promising all
sorts of stimulus, lots of talk, but not much action
and very little actually done in terms of real concrete policies.
So this is getting more and more urgent, particularly because
(02:32):
the Chinese economy is very very unbalanced. It's really relying
a lot at the moment on exports and exporting all
its over capacity overseas. But that's running into fierce resistance
from places like the European Union and the United States
who are putting tariffs on all sorts of products. So
it's not going to be able to rely on exports
(02:54):
next year as its main driver of growth. Has got
to find a way of getting consumers cansumption going again.
Speaker 1 (03:01):
Right South Korea, what on earth is happening there? Now?
What's the situation around the president?
Speaker 2 (03:07):
Well, he was Congress voted to impeach him. So now
what happens is there's one hundred and eighty day period
where the Constitutional Court reviews that decision and they will
decide either to uphold the impeachment or they will decide
to reinstate him. And they've started that process. Now. Now
(03:29):
once that one hundred or once they've made that decision
within that one hundred and eighty day period, they then
have sixty days after that to hold elections and elect
a new president. In the meantime, the current president is
stripped of all of his responsibilities and the Prime Minister
has taken over as president. But it's a very uncertain
(03:51):
situation because it really means right now South kored doesn't
have a leader, doesn't have a president, it can't really
take part in major international diplomatic initiatives, and that's going
to be very, very important with the Donald Trump coming
to power next month. It's tried to build up under
(04:11):
the old president alliances with Japan in particular and also
the United States. So people are wondering what's going to
happen to those diplomatic initiatives, and everything really is in limbo,
which sort of drags on the economy and leaves a
lot of uncertainty.
Speaker 1 (04:29):
Now there is a potential for a merger between the
carmakers and and Honda. There holding merged talks. What do
we know at the stage.
Speaker 2 (04:38):
Well, if this happens, It was reported on Tuesday that
they are in exploratory talks. The Japanese car makers, as
have car makers in Europe and elsewhere, have been absolutely
decimated by the rise of Chinese car makers. They've really
over the last few years come from nowhere to dominate
the electric vehicle market. Their brands all over the world
(05:02):
now and they are really the leading eb carmakers, and
it's put enormous pressure on these more traditional car makers
like Nissan and Honda. Nissan anyway has been struggling for years.
If it were to merge with Honda, it would create
a fifty two billion dollar car giant, and there's talk
about including Mitsubishi motors in it as well. This would
(05:26):
really transform the auto industry because it will basically now
turn Japan into a two company market in that sector,
and the combined Nissan Honda Mitsubishi company will be the
third largest automaker in the world, behind Toyota and Volkswagen.
So this is a really transformative deal. If it were
(05:49):
to happen, it will give the carmakers a lot more
scale to make investments to compete with the Chinese manufacturers
and also with Tesla in the EV space. But there
is going to be one big problem with it, and
that is deals like this one of the ways in
which they save costs is there are enormous job cuts,
(06:10):
and there's a big question mark over whether Japan is
really ready to face up to the types of layoffs
that this type of deal would lead to.
Speaker 1 (06:21):
Yeah, and what would they call it? Nissan and Honda,
which the name do you go with or do you
do a hybrid? That's the big question.
Speaker 2 (06:27):
Well, they'll do some sort of new name, like they
did with Stillantis back in twenty twenty one when fear
Chrysler joined with Francis PSA group and came up with
a totally new name called Stellantis.
Speaker 1 (06:41):
I don't like that name. What would you would you
go like? Hessan, Maybean or Nanda? Thank you very much,
Peter Lewis that Asia Business corresponding. For more from Hither
Duplasy Alan Drive, listen live to news talks. It'd be
from four pm weekdays, or follow the PODCA cast on iHeartRadio.
Cry and Bridge, right, we're going to pay the Lewis
Asia Business correspondent who's with us paid.
Speaker 2 (00:04):
A good evening, Good evening, Ryan.
Speaker 1 (00:07):
China has been desperate to boost its economy, retail sales
of mess, the expectations and November.
Speaker 2 (00:13):
Yeah, this has been the big theme really of twenty
twenty four in China. The consumer just does not want
to spend, and unlike in other Western economies where consumption
can be as much as three quarters of the economy,
in China it really is lagging behind. So China, which
(00:33):
has been relying on exports to try and boost its economy,
that's a pillar that is not going to be able
to rely on next year, really needs to get consumption going.
One of the reasons why it can't despite all the
stimulus measures that it's announced, is because it hasn't really
done anything to expand the social safety net. In China.
(00:55):
People are worried about their jobs. Youth unemployment is close
to twenty percent, so very high. People are worried about
things like healthcare, which they after the pandemic, many people
realize that so you know, they were going to have
to pay for their own health care. So people are
saving for these unforeseen circumstances rather than spending, and that's
(01:16):
been a real drag on the economy. So China's come
up with all sorts of measures to try and address this,
but nothing is really really working. President Ejinping has said
this will be the number one economic priority next year
to boost consumer demand. But the question on everyone's lips
is how what is actually you're going to do to
(01:39):
do this, And we haven't seen any details of any
policies yet.
Speaker 1 (01:42):
No when are we going to see details? Do we
have any indication of when they might come, and if so,
how significant they might be.
Speaker 2 (01:50):
Well, the China has what's known as its Two Sessions,
which is its major parliamentary meeting in March, and that's
when traditionally you get details. For example, it's economic growth targets,
which last year this year was five percent. The rumors
are it's going to stick with that five percent growth
target this year as well that the markets are getting very,
(02:11):
very jittery. They just can't wait that long. And one
of the problems we've had this year is we've had
a lot of press conferences from ministry officials promising all
sorts of stimulus, lots of talk, but not much action
and very little actually done in terms of real concrete policies.
So this is getting more and more urgent, particularly because
(02:32):
the Chinese economy is very very unbalanced. It's really relying
a lot at the moment on exports and exporting all
its over capacity overseas. But that's running into fierce resistance
from places like the European Union and the United States
who are putting tariffs on all sorts of products. So
it's not going to be able to rely on exports
(02:54):
next year as its main driver of growth. Has got
to find a way of getting consumers cansumption going again.
Speaker 1 (03:01):
Right South Korea, what on earth is happening there? Now?
What's the situation around the president?
Speaker 2 (03:07):
Well, he was Congress voted to impeach him. So now
what happens is there's one hundred and eighty day period
where the Constitutional Court reviews that decision and they will
decide either to uphold the impeachment or they will decide
to reinstate him. And they've started that process. Now. Now
(03:29):
once that one hundred or once they've made that decision
within that one hundred and eighty day period, they then
have sixty days after that to hold elections and elect
a new president. In the meantime, the current president is
stripped of all of his responsibilities and the Prime Minister
has taken over as president. But it's a very uncertain
(03:51):
situation because it really means right now South kored doesn't
have a leader, doesn't have a president, it can't really
take part in major international diplomatic initiatives, and that's going
to be very, very important with the Donald Trump coming
to power next month. It's tried to build up under
(04:11):
the old president alliances with Japan in particular and also
the United States. So people are wondering what's going to
happen to those diplomatic initiatives, and everything really is in limbo,
which sort of drags on the economy and leaves a
lot of uncertainty.
Speaker 1 (04:29):
Now there is a potential for a merger between the
carmakers and and Honda. There holding merged talks. What do
we know at the stage.
Speaker 2 (04:38):
Well, if this happens, It was reported on Tuesday that
they are in exploratory talks. The Japanese car makers, as
have car makers in Europe and elsewhere, have been absolutely
decimated by the rise of Chinese car makers. They've really
over the last few years come from nowhere to dominate
the electric vehicle market. Their brands all over the world
(05:02):
now and they are really the leading eb carmakers, and
it's put enormous pressure on these more traditional car makers
like Nissan and Honda. Nissan anyway has been struggling for years.
If it were to merge with Honda, it would create
a fifty two billion dollar car giant, and there's talk
about including Mitsubishi motors in it as well. This would
(05:26):
really transform the auto industry because it will basically now
turn Japan into a two company market in that sector,
and the combined Nissan Honda Mitsubishi company will be the
third largest automaker in the world, behind Toyota and Volkswagen.
So this is a really transformative deal. If it were
(05:49):
to happen, it will give the carmakers a lot more
scale to make investments to compete with the Chinese manufacturers
and also with Tesla in the EV space. But there
is going to be one big problem with it, and
that is deals like this one of the ways in
which they save costs is there are enormous job cuts,
(06:10):
and there's a big question mark over whether Japan is
really ready to face up to the types of layoffs
that this type of deal would lead to.
Speaker 1 (06:21):
Yeah, and what would they call it? Nissan and Honda,
which the name do you go with or do you
do a hybrid? That's the big question.
Speaker 2 (06:27):
Well, they'll do some sort of new name, like they
did with Stillantis back in twenty twenty one when fear
Chrysler joined with Francis PSA group and came up with
a totally new name called Stellantis.
Speaker 1 (06:41):
I don't like that name. What would you would you
go like? Hessan, Maybean or Nanda? Thank you very much,
Peter Lewis that Asia Business corresponding. For more from Hither
Duplasy Alan Drive, listen live to news talks. It'd be
from four pm weekdays, or follow the PODCA cast on iHeartRadio.
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