Speaking with CNBC, Citigroup’s (NYSE: C) Global Markets Asia Managing Director Johanna Chua discussed what she expects from the Chinese economy in 2022 on the consumer side, analyzing the property market and the Yuan. Chua believes that China should be concerned about the well-being of its consumer side and that this is one area where she believes the country might benefit from a little more policy support.
Small and medium-sized companies to feel pressure
The managing director revealed that she thinks the government won’t abandon the zero-covid any time soon. Given the status of the services industry and the restrictions on that front, there will undoubtedly be pressure on small and medium-sized businesses. As a result, Chua believes it will be intriguing to see to what degree these firms will see further relief and policy assistance for the SME sector. Among the most important questions that the managing director addressed was whether we would see additional fiscal assistance, not just in the form of infrastructure, but also on the consumer side given the uncertainty in the property sector in recent months. Due to the uncertainty with property, it is conceivable that people are not confident, in which case they will increase their savings, resulting in a smaller multiplier impact. For this reason, Chua considers that China’s fiscal policy assistance is focused more toward infrastructure, as there the government knows they have a little bit more leverage and control.
China’s GDP grew 8% in 2021
Notably, China’s GDP grew at an annual pace of 8.1% in 2021, the highest in almost a decade and far beyond the government’s yearly objective of at least 6% growth, according to Chinese state media. However, in 2022, Johanna Chua expects the growth to be much lower as the global goods trade will be less in demand, she stated:
Citigroup’s 2021 Q4 net income drops 26% YoY
Elsewhere the banking American giant reported a net income of $3.2 billion in the fourth quarter of 2021, a decrease of 25.5% from the $4.3 billion earned in the same period of 2020. Citi also noted that the company’s $17 billion fourth-quarter revenue was boosted by a surge in investment banking led by institutional clients. For the whole year, the bank reported revenues of $71.9 billion, with the institution noting increased corporate revenues as a primary driver of the increase in revenues. Nevertheless, Citigroup’s revenue in North America fell 6% to $4.4 billion, owing to a decline in sales of Citi-branded cards. Asia had a 9% fall in revenue, while Latin America saw a 4% decline in sales. Watch the video: Citigroup predicts China’s economy to grow 4.7% in 2022
