HSBC is ‘very positive’ about the future of China’s economy, CFO says

HSBC is “very positive” about the mid- to long-term outlook for the Chinese economy despite current headwinds, the British bank’s chief financial officer told CNBC.

Growth in China has been weighed down over the past year by a slump in the country’s traditional economic pillars of real estate, infrastructure and exports. This prompted Beijing to ramp up its efforts to bolster manufacturing and domestic tech in a bid to modernize its economy and remain globally competitive.

Speaking to CNBC’s Karen Tso on Wednesday, HSBC CFO Georges Elhedery said the lender — which is headquartered in London but does a lot of its business in Hong Kong and across the Asia-Pacific — was confident that the world’s second-largest economy would overcome its short-term headwinds.

“We’re looking at major economic transition, which is taking place, which gives us very strong grounds to be very positive about the medium- and long-term outlook,” Elhedery said.

He suggested that China’s economic maturity has reached such a stage that now is the “right time to transition into what more mature economies are.”

Elhedery characterized this maturity as being more heavily reliant on consumers, the services industry and high-value and sustainability-driven products, such as electric vehicles and batteries, aspirations he said were evidenced by the Chinese government’s recent massive push toward these sectors.

“That transition will mean that China will avoid falling in this middle income trap and be able to continue the growth pattern,” he added.

“Some of the Western economies have gone through those transitions in the past, [and] China is going through a transition today. That gives us a lot of positive outlook for the medium- to long-term for China.”

The more immediate economic challenges may last “a few quarters to a couple of years,” Elhedery said, but expressed…