China had the strongest growth of any large economy in q2, thanks to its apparent success at containing the virus and helped by a strong rebound in exports.
@JChengWSJ asks the right question, namely can the rebound be sustained
wsj.com/articles/china…
@JChengWSJ asks the right question, namely can the rebound be sustained
wsj.com/articles/china…
The challenge China's economy faces is simple: Industrial production rebounded more strongly than consumption. June industrial production was up 4.8% y/y, while retails sales were down 1.8% y/y ...
VW's Stephan Wöllenstein (quoted by @KeithBradsher) summarizes the current situation sharply.
This is the key chart of China -- and for the world.
Weakness in internal demand means that China will look to export its way out ... adding to the global deflationary shock.
nytimes.com/2020/07/15/bus…
Weakness in internal demand means that China will look to export its way out ... adding to the global deflationary shock.
nytimes.com/2020/07/15/bus…
The relative strength of investment and relative weakness of consumption stems directly from Beijing's policy choices --
It relied on tax cuts for businesses to support firm's cash flows & traditional local infrastructure investment, while doing little to provide income support
It relied on tax cuts for businesses to support firm's cash flows & traditional local infrastructure investment, while doing little to provide income support
That was a choice, and a choice not obviously driven by any financial constraints -- the central government has ample borrowing capacity ...
