SHOWS: HONG KONG, CHINA (JANUARY 10, 2012) (REUTERS - ACCESS ALL)

EMERSON YIP, INVESTMENT MANAGER, GREATER CHINA TEAM, J.P. MORGAN ASSET MANAGEMENT

1. REPORTER OFF CAMERA SAYING:

'Trade data came out today - imports figure beat expectations. What are your thoughts?'

2. EMERSON YIP SAYING:

'Well certainly the export data that came out is higher than my expectations. That said, I do expect overall stabilization for the entire year. I think we have seen increasingly signs, we're getting more, J.P. Morgan overall, getting more positive about both the U.S. and to a lesser extent, Japan and Europe. So I expect the trend to be positive. I think this set of data was faster than what we thought. That said, I don't think it's going to be a wildly positive year. I don't think exports will be a key driver for the economy. I think 2013 will remain a domestic acceleration story for China.'

3. REPORTER OFF CAMERA SAYING:

'With the positive data today - how would that change your positions in export-sensitive stocks?'

4. EMERSON YIP SAYING:

'I don't think it's going to make a meaningful change. If anything, I'm planning to trim into strength here in terms of any export-sensitive because I think we've seen a recovery. I think expectations were obviously too negative so things have stabilized. But the next phase of growth here, I'm not counting on a wildly bullish global economy. What I am counting on is more measures and more economic resilience within China. So I'd rather be in the domestic sectors as opposed to the externally sensitive sectors like exports.'

5. REPORTER OFF CAMERA SAYING:

'On Wednesday, China's securities regulators are tightening their grip on listings, potentially putting China's IPO market on hold until the end of March. What impact will this have on the supply overhang concerns on mainland stocks?'

6. EMERSON YIP SAYING:

'I think just to kind of take this point in context here. Obviously as your viewers are probably well aware of, A-shares has been under a lot of stress recently, has underperformed both China shares and Hong Kong as well as global stock markets. So I think the regulators there are concerned. On the other hand, is stock market the number 1 priority in Beijing? Probably not. But what we're seeing now is that given the smooth political transition in October, the policymakers now have had time to focus on the second-tier issues. And stabilizing and creating a healthy capital market is part of the longer term economic reform. That is top priority for Beijing. The longer term economic reform includes a healthy capital market. I don't think that policymakers are saying, 'well, we don't want Shanghai to grow at all. We'll have everybody else grow, and Hong Kong, and other stock markets.' No, I think ultimately they want Shanghai to grow. But in the short term what they're saying is, 'let's not have a unmanaged growth.' In terms of supply of shares, that could lead to further damaged confidence vis-à-vis investing the in A-share market. So I take it as a healthy sign. Short term is obviously positive for us here because what that means is more trading volumes come here, more companies get listed. And then in the case of A-shares or the A-share market, there will be restrained supply growth. So that should support further the bull market or at least the beginnings of a bull market that we're starting to see in Shanghai. So I think it's a win-win short term. I think frankly it's a little bit overdue. And I expect to see further support of measures for the A-share market going forward.'