00:00But let's chat a little bit about China's economy. It's facing pressure from U.S. tariffs and persistent deflationary pressure at home.
00:08As Beijing is trying to soften the economic damage, was it really important to reach a quick deal with the U.S. and de-escalate the trade war to kind of support themselves?
00:21It's a really good question. And I think it goes to this question that we've all been trying to sort of weigh up.
00:26Who hurts more in a big trade war? Is it the U.S. or is it China?
00:32And I think the answer is, is that the two countries can be hurt in different ways.
00:37There certainly is. There are some indications the Chinese economy is beginning to bottom out a little bit.
00:43That terrible property slump, which is sort of the start of where this deflation that we're seeing has come from, looks like that might be bottoming out.
00:52We're seeing prices of homes in the biggest Chinese cities has stopped falling, maybe too early to predict a recovery.
01:00But I think there's a little bit more optimism than there was a couple of months ago.
01:05But the other thing to think about is what China exports to the U.S. is pretty low tech stuff, commodity stuff, things like steel, things like footwear, clothing.
01:16And those items are very easy to divert to other jurisdictions.
01:21So in the month of May, we saw a 35 percent decrease in Chinese exports to the U.S.
01:27That's that's over the same period a year ago. That is a massive, massive fall.
