StanChart CEO Highlights China's Thriving EV Sector Amid Decompression of the Old Economy

09 Nov, 2023

StanChart CEO Highlights China's Thriving EV Sector Amid Decompression of the Old Economy

Standard Chartered's CEO, Bill Winters, revealed that amidst China's somewhat bumpy economic recovery, the country is experiencing remarkable growth in a specific sector—electric vehicles (EVs) and sustainable, renewable power technology.

In an interview with CNBC's Emily Tan at the Global Financial Leaders’ Investment Summit, Winters emphasized China's resilience in building a more sustainable and robust economy. He noted the strategic approach of gradually decompressing old economy sectors and accelerating growth in new economy sectors.

China has become a global leader in the electric vehicle market, boasting the largest EV market with 5.9 million units sold in 2022, capturing 59% of the global EV market, according to Canalys research. Domestic brands dominate, constituting 81% of the market, with top players including BYD, Wuling, Chery, Changan, and GAC.

In contrast, China's property market has faced challenges due to faltering consumer confidence, exacerbated by the debt problems of real estate giants like Evergrande and Country Garden. Standard Chartered has actively reduced its exposure to China's troubled property sector, positioning itself well against market uncertainties.

Winters acknowledged that calling a bottom to China's real estate market is premature, but he noted that the property markets are well into the second half of their decompression. Standard Chartered recently reported a 33% slump in pre-tax profit for the third quarter, reflecting the impact of challenges in China's economic landscape.

Despite these challenges, China remains a vital market for Standard Chartered, alongside other key markets like India, the United Arab Emirates, South Korea, Singapore, and Hong Kong. Winters emphasized Hong Kong's significance, highlighting its status as the bank's largest single market with a growing offshore business, witnessing an annual growth rate between 50% to 60%.