The implicit target for China’s #GDP nominal growth in 2020 is 5.4%. But if #infrastructure #investment can't grow rapidly, it'll be hard to achieve given the GDP growth in Q1-2, according to CF40 Advisor Yu Yongding and Young Fellow Zheng Liansheng:
mp.weixin.qq.com/s/aOpeV-Z8oG_A…
1/5
To boost infrastructure investments, the government needs to step up issuing bonds including special bonds while making full use of social capital... 2/5
Given that the government plays the pivotal role in this effort, it’s important that #PBC and MOF coordinate their policies. PBC may have to consider implementing “#QE in #China” to cushion the crowd-out effects as a result of the massive issuance of government bonds... 3/5
China may face a dilemma: should it further strengthen its fiscal expansion policies? Or should it accept lower GDP growth to avoid the deterioration of fiscal situation, which could exacerbate #unemployment and push the economy into a vicious circle of #debt and deflation? 4/5
Yu Yongding and Zheng Liansheng suggest to choose the lesser of the two evils – that China should continue the expansionary fiscal and monetary policies, pursue higher economic growth, and leave all consequent problems to be dealt with afterwards. 5/5
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.