KKR｜2024年4月中国之路的思考.docx

Thoughts

FromtheRoad

CHINA|April2024

IrecentlytraveledtoChinatovisitwithCEOs,

policymakers,andKKRdealteams.IalsospentlotsoftimewithmyteammatesChangchun

Hua,whoservesasChiefEconomistforGreaterChina,andAllenLiu.Seebelowforthedetails,butourconclusionsfromthismostrecentvisitareasfollows:

1.China’seconomyhasbottomed.Thisvisitwasmyfourthinthepastfivequarters,butthistimefeltdifferent.Easieryear-over-yearcomparisonscertainlyhelp,butsomeofthe‘scarringeffect’fromCOVIDisdissipatingtoo.That’sanimportantdevelopment.Atthesametime,though,ourconversationswithlogisticscompanyexecutives

suggestedthattheU.S.consumerisrebounding,helpinglocalgoodsexportersaswell.Finally,Chinaisnowalsobenefittingfromagreaternumberofcountriestransacting

morefrequentlyinrenminbithesedaysversusbeforeCOVID.

2.Maybemoreimportantly,tradewithinAsia,whichweviewasamegatheme,

continuestogainmomentum.Alltold,AsiaisbecomingmoreAsiacentricastradewithintheregionrises:In1990,just46%ofAsiantradetookplacewithinAsia,but

HenryH.McVey

HeadofGlobalMacro

AssetAllocation,

CIOKKRBalanceSheet

henry.mcvey@

ChangchunHua

ChiefEconomistfor

GreaterChina

changchun.hua@

AllenLiu

allen.liu@

ThoughtsFromtheRoad|China|April20242

by2021,thatfigurehadreached58%.Weseethis

percentageincreasinganother10%overthecoming

years.Importantly,therearegrowingcountryrivalriesembeddedinthisgrowthforecast,but–todate–Chinahasgainedsharenotonlythroughitscompetitive

exports,butalsobycreatingamorelocalpresence

inkeymarketssuchasVietnam.Forglobalinvestors,

bothAsiainfrastructureandAsiaCredit(bothliquidandprivatemarkets)areeffectivewaystoplaythisthemeacrosstheregion,webelieve.

3.TherebalancingoftheChineseeconomytowards

automationandtheenvironmentisd