China is approaching a more proactive fiscal policy while the housing price, instead of the pork price, matters more to monetary policy, said CF40 member Wu Ge, 1/5. mp.weixin.qq.com/s/Cgxm_fsmvccK….
China has been witnessing a very different economic downturn. Externally, #tradefriction is pounding the periodically-easing global economy; internally, less satisfying macroeconomic data is under pressuring real estate control. 2/5
Unlike Japan and Germany who suffered from the pressure to liberalize trade with the US, China is adopting more varied policy mix. The RMB#exchangerate is gradually unhooked from the US dollar index since the #tradefriction, which will compensate for dropping overseas demand.3/5
From the perspective of rising fiscal deficit ratio in the narrow sense and range of #taxcut, China is pursuing a proactive fiscal policy. However, considering the mild pick-up in infrastructure investment, fiscal expansion in the broad sense is still moderate. 4/5
Looking ahead, giving the challenging economic growth target,#China will adopt more active fiscal policy with a descending loan interest rate and more flexible exchange rate. We are expecting a drifting-down economic situation in Q3 which may settle down in Q4. 5/5
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