Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

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Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

China's economic policy response to the COVID-19 pandemic has been lacklustre by historic standards, thereby surprising those who have become accustomed to easier credit conditions whenever the country has encountered headwinds. Prior episodes of easier credit conditions have resulted in moral hazard that could jeopardise financial stability, an outcome the authorities are keen to avoid via remedial measures. The changing external environment, particularly bilateral relations with the US in the realm of technology, has forced Beijing to focus on medium-term domestic issues, particularly re-balancing the economy. Achieving financial stability is viewed as an essential ex-ante condition before any economic transformation can take place.Despite their tight historic nexus with local governments, real estate developers have been targeted to reduce aggregate leverage in the financial system and, consequently, this has imparted financial pain and elevated media scrutiny on highly-indebted borrowers. Meanwhile, state-owned enterprises (SOEs) are no longer automatically guaranteed a blanket government backstop, as the state seeks to improve operational and financial efficiency within these entities, thereby raising the spectre of consolidation.In recent years, the government has become increasingly worried about the scope for social unrest due to widening socio-economic disparities across the country. The government aims to achieve more inclusive economic growth by increasing the well-being of the middle class, an outcome deemed necessary to structurally boost consumption.China maintains a tough zero tolerance stance towards COVID-19 and slower growth in Q3 reflects this approach, while the near-term outlook will be heavily influenced by potential new outbreaks of the virus. No major policy changes should be expected before the November 2022 Standing Committee meeting, an event whereby President Xi could secure another term in office having succeeded in removing limits in 2018.

China's economic policy response to the COVID-19 pandemic has been lacklustre by historic standards, thereby surprising those who have become accustomed to easier credit conditions whenever the country has encountered headwinds. Prior episodes of easier credit conditions have resulted in moral hazard that could jeopardise financial stability, an outcome the authorities are keen to avoid via remedial measures. The changing external environment, particularly bilateral relations with the US in the realm of technology, has forced Beijing to focus on medium-term domestic issues, particularly re-balancing the economy. Achieving financial stability is viewed as an essential ex-ante condition before any economic transformation can take place.Despite their tight historic nexus with local governments, real estate developers have been targeted to reduce aggregate leverage in the financial system and, consequently, this has imparted financial pain and elevated media scrutiny on highly-indebted borrowers. Meanwhile, state-owned enterprises (SOEs) are no longer automatically guaranteed a blanket government backstop, as the state seeks to improve operational and financial efficiency within these entities, thereby raising the spectre of consolidation.In recent years, the government has become increasingly worried about the scope for social unrest due to widening socio-economic disparities across the country. The government aims to achieve more inclusive economic growth by increasing the well-being of the middle class, an outcome deemed necessary to structurally boost consumption.China maintains a tough zero tolerance stance towards COVID-19 and slower growth in Q3 reflects this approach, while the near-term outlook will be heavily influenced by potential new outbreaks of the virus. No major policy changes should be expected before the November 2022 Standing Committee meeting, an event whereby President Xi could secure another term in office having succeeded in removing limits in 2018. 

China Starts Taking the Painful Steps Necessary for Economic Rebalancing