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  • Writer's pictureJohn Khoo

On Policy: Reflections on Future of Finance 2021 Conference

John Khoo reflects on Future of Finance 2021 Conference's Policy Panel.



Hosted by 6 of the LARGEST careers societies from leading global universities, Future of Finance 2021 was organised by UCL FinTech Society, LSE SU FinTech Society, LSE PRIS, Imperial Finance Society, Warwick Entrepreneurs Society & King's Business Club.

The speaker


Francoise Huang, Senior Economist for Asia Pacific, Euler Hermes


Françoise joined Euler Hermes in 2019 as the Senior Economist for Asia Pacific. Before her current position, Françoise worked as an Economist for over 5 years at the equity broker Exane BNP Paribas in London. There, she was in charge of the macroeconomic analysis of the Chinese economy and Emerging Markets. She also worked on global and European topical themes. Her other work experiences include the ACPR, the French supervisor for the banking and insurance sectors. Françoise is a graduate from ENSAE ParisTech, with a Statistician Economist degree, specialised in economic forecasting and public policies. She also studied in the APE programme (economic analysis and policy) at Paris School of Economics.


The panel


How has the pandemic pushed China’s bid to become the world’s largest economy 2 years forward from 2032 to 2030? What factors have caused this and what should we see from Beijing coming forward? These questions were answered by Françoise Huang, a Senior Economist for Euler Hermes & Allianz, who broke down China’s post-Covid recovery process in the Future of Finance Conference’s policy segment.


Firstly touching on vaccine economics driving global economic recovery, she noted that there will be different factors affecting the speed and effectiveness of vaccination campaigns, such as the numerous hurdles facing supply chains and vaccine demand. With the flexibility of health systems and appropriate infrastructure being instrumental in preventing supply-side bottlenecks, populations around the world must also be willing to get vaccinated in order for these campaigns to be successful.


Given China’s stringent lockdown measures implemented since January 2020, it has emerged as the leader in global economic recovery, being the only country in the G20 with a positive growth rate in 2020 (2.2%). We can specifically see China winning export market share, which has performed better from April to November 2020 than it has done in previous years. This is attributed to increased demand for goods that are seasonally important during this pandemic, namely electronics, medical supplies and construction. Combined with expansionary fiscal and monetary policy in the infrastructure and real-estate industries, both of which are extremely sensitive to policy changes, rapid easing of financial conditions has allowed these vital industries to bounce back. We should expect consumer demand to be trailing behind with the retail industry starting to recover only in September 2020.


In 2021, we’ll see a shifting of recovery tools from the demand-side to the supply-side. The Chinese Government is starting to slowly withdraw monetary and fiscal policy support without provoking credit risk and derailing recovery. Since it would not want to create bubbles that could be problematic in the long run, its unprecedented level of fiscal stimulus will eventually have to be normalised. The recent National People’s Congress has already set the ball rolling with fiscal support set at levels even lower than expectations. Therefore, expect to see a decline in fiscal support in the coming years. Looking to the future, China’s predominant dual-circulation strategy will focus on domestic production with industrial autonomy being its main priority, since its dependence on semiconductor exports was exposed as a weakness during the ongoing trade war with the United States.


Seeing Françoise dig into the growth numbers has really put into perspective China’s accelerated path towards becoming the world’s biggest economy, and how it plans to use digitalisation and autonomy as a launchpad to achieve it. This pandemic has been a stumbling block for most economies, but stringent measures in 2020 have enabled countries such as China to recover faster and take the mantle from the US in a shorter period of time. It is also important to note how it may use this head start to further its Artificial Intelligence and 5G modernisation efforts and become a 21st century global superpower.


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