HSBC's CFO expresses optimism about China's economic future.

• The decline in China's traditional economic sectors, including real estate, infrastructure, and exports, has hindered the country's growth over the past year.

Despite current headwinds, the British bank's chief financial officer is "very positive" about the mid to long-term outlook for the Chinese economy, according to CNBC.

Beijing has intensified its efforts to boost manufacturing and domestic technology in an attempt to modernize its economy and maintain global competitiveness, as growth in China has been hindered by a decline in traditional economic sectors such as real estate, infrastructure, and exports over the past year.

On Wednesday, HSBC CFO Georges Elhedery stated to CNBC's Karen Tso that the lender, which is based in London but conducts a significant amount of its business in Hong Kong and throughout the Asia-Pacific region, is optimistic about China's ability to overcome its short-term challenges.

Elhedery stated that the major economic transition currently taking place provides strong reasons to be optimistic about the medium and long term outlook.

Elhedery described this maturity as being heavily dependent on consumers, the services industry, and high-value and sustainability-driven products, such as electric vehicles and batteries, as aspirations evidenced by the Chinese government's recent push toward these sectors.

He stated that the transition would enable China to avoid being stuck in the middle income trap and maintain its growth trajectory.

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Elhedery stated that the immediate economic challenges may persist for "a few quarters to a couple of years," but expressed optimism that China will be in a better position for the long run, as the country is taking a "materially better forward-looking track."

HSBC failed to meet its full-year 2023 pretax profit forecasts due to a $3 billion write-down on its 19% stake in China's Bank of Communications and a $4.6 billion reduction in its exposure to Chinese commercial real estate year-on-year.

On Thursday, Yet Elhedery stated that the challenges related to the Chinese property market are "behind us," but he also emphasized that the sector is not "out of the woods" yet.