In today’s briefing:
- China Reverts to Infrastructure Stimulus to Boost Economy, but Legacy Issues Loom Large
China Reverts to Infrastructure Stimulus to Boost Economy, but Legacy Issues Loom Large
- The Chinese government has resorted to stimulus via infrastructure spending to boost the economy, a route that has historically stabilised growth. Much-hyped accelerated bond sales cannot solve China’s current woes.
- China’s slowdown is attributable to legacies from the 2009 stimulus, notably the rise of shadow banking. Attempts to curb the real estate sector and technology companies have also created headwinds.
- The ongoing threat of new lockdowns creates a challenging outlook for consumer spending in China, thereby making achieving the +5.5% official growth target for 2022 virtually impossible.
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