Head of China Research - Forsyth Barr Asia, Forsyth Barr Asia

David Millhouse

Head of China Research - Forsyth Barr Asia

Forsyth Barr Asia

Macroeconomics

On Monday i wrote that "policy inactivity and mismanement has become and enormour issue in China". Last night the PBOC cut interest rates and the RRR. Economically, a rate and RRR cut by it is not enough to stabilize growth. China still has several structural negatives which are currently hindering economic momentum, namely severe overcapacity in several sectors, inefficient capital allocation, high debt levels of corporates and local governments, a slowing uneven property recovery, and an uncertain environment for exports. Several measures concurrently are needed to deal with this. We&nbsp;HOPE monetary easing will be the first step in a near term coordinated policy response.&nbsp; Urgency is needed, in particular on reform&nbsp;

On Monday i wrote that "policy inactivity and mismanement has become and enormour issue in China". Last night the PBOC cut interest rates and the RRR. Economically, a rate and RRR cut by it is not enough to stabilize growth. China still has several structural negatives which are currently hindering economic momentum, namely severe overcapacity in several sectors, inefficient capital allocation, high debt levels of corporates and local governments, a slowing uneven property recovery, and an uncertain environment for exports. Several measures concurrently are needed to deal with this. We&nbsp;HOPE monetary easing will be the first step in a near term coordinated policy response.&nbsp; Urgency is needed, in particular on reform&nbsp;

CHINA MACRO: Rate & RRR cuts alone are not enough to stabilise growth