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James Roy: China stimulus within four weeks
More mixed signals from China, raising the prospect of the government stepping in with fresh stimulus. The latest HSBC purchasing managers index was down again at 48 but the official PMI was slightly up at 50.3 from February’s 50.2, in line with expectations.
James Roy, from China Market Research Group, assesses the latest evidence of slowing growth and the likely timetable for stimulus. Many economists and China watchers still maintain that Beijing can control the country’s descent from decades of double digit GDP towards a more sustainable economic model, based on consumer spending.
However, slowing growth comes at the same time as huge amounts of bad loans are swilling around in the economy, so can Beijing avoid a hard landing? Chinese banks have doubled the number of written off bad loans. The question divides opinion but looks likely to be answered soon as China is under pressure to find ways to keep to its 7.5 growth target this year.
02:00 minutes
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