On Sunday, Global Times published an editorial warning against allowing a surge in debt later this year to counteract the impact of COVID-19, pointing out that “past experience with massive stimulus already showed that a flood of investments could lead... globaltimes.cn/content/117991…
...to many consequences like high levels of local government debts, and to the detriment of high-quality economic growth.” At the time I tweeted “Already those who are more worried about rising debt and those more worried about slowing growth are positioning themselves for the...
...economic fight over the expected increase in fiscal spending after COVID-19.”
Yesterday the same Global Times published an opposite editorial, arguing for those who are more worried about slowing growth: “All-out efforts are now needed from both central authorities and...
Yesterday the same Global Times published an opposite editorial, arguing for those who are more worried about slowing growth: “All-out efforts are now needed from both central authorities and...
...local governments to lift the economy out of its standstill. And a 6 percent growth target is now essential in terms of assessing the economic performance of local governments during these difficult times.” A GDP growth target is automatically also a credit growth...
...target, only that because of the economic effects of the pandemic, the credit growth implicit in the GDP growth target has risen substantially.
So what will Beijing decide? For now we shouldn’t take either editorial as representing Beijing’s consensus. I suspect that...
So what will Beijing decide? For now we shouldn’t take either editorial as representing Beijing’s consensus. I suspect that...
...there is in fact a ferocious debate behind closed doors between those who are more worried than ever about rising debt and those who are more worried about the political-economy impact of a slowdown in economic activity. Among other things the postponing of early March’s...
...“two sessions” (probably by no more than 2-3 weeks), given both sides time to strengthen their arguments. During the conference we’ll see how strongly the “around 6%” GDP growth target is officially affirmed, and how much hedging there is. My guess is that the latter...
...group -- those worried about slowing growth -- will win the debate next month, although I hope I am wrong. I also expect, in that case, that within a few months debt levels will have deteriorated so sharply that those more worried about rising debt will regain the initiative.
