1/7
As expected, consumption in China seems to be rebounding strongly, and exports are expected to continue growing. The IMF is taking this to mean that they should upgrade their 2021 GDP growth expectations for China to 8.4%.
xinhuanet.com/english/2021-0…
As expected, consumption in China seems to be rebounding strongly, and exports are expected to continue growing. The IMF is taking this to mean that they should upgrade their 2021 GDP growth expectations for China to 8.4%.
xinhuanet.com/english/2021-0…
2/7
My view is different. I think strong consumption and export numbers will give Beijing a chance to cut back more sharply on credit growth, which basically means cutting back on investment in real-estate development and infrastructure...
imf.org/en/News/Articl…
My view is different. I think strong consumption and export numbers will give Beijing a chance to cut back more sharply on credit growth, which basically means cutting back on investment in real-estate development and infrastructure...
imf.org/en/News/Articl…
3/7
spending, which is why I expect consumption and exports to continue strengthening without raising GDP growth expectations. Remember that Beijing uses this investment mainly as the residual needed to plug the gap between "high quality growth" and the...
spending, which is why I expect consumption and exports to continue strengthening without raising GDP growth expectations. Remember that Beijing uses this investment mainly as the residual needed to plug the gap between "high quality growth" and the...
4/7
politically-determined GDP growth target. More of the latter allows them to rely less on the former, which is something they have made clear they are eager to do.
The irony is that the IMF agrees that China must get credit under control, but they seem to ignore the...
politically-determined GDP growth target. More of the latter allows them to rely less on the former, which is something they have made clear they are eager to do.
The irony is that the IMF agrees that China must get credit under control, but they seem to ignore the...
5/7
economic implications of doing so. One of their spokespersons said Tuesday that "it is also very important to unwind the implicit guarantees that are embedded in the system. It is a very delicate act but an urgent one in order to achieve financial stability."
economic implications of doing so. One of their spokespersons said Tuesday that "it is also very important to unwind the implicit guarantees that are embedded in the system. It is a very delicate act but an urgent one in order to achieve financial stability."
6/7
But these guarantees are necessary only because they are used to support non-productive activity that businesses otherwise would be eager to avoid, as I explained in the FT a year ago. Less credit of the kind...
ft.com/content/907740…
But these guarantees are necessary only because they are used to support non-productive activity that businesses otherwise would be eager to avoid, as I explained in the FT a year ago. Less credit of the kind...
ft.com/content/907740…
7/7
Beijing (along with the IMF) wants eagerly to restrain means less investment in infrastructure and real estate development, and therefore less economic activity that is included in the GDP data.
Beijing (along with the IMF) wants eagerly to restrain means less investment in infrastructure and real estate development, and therefore less economic activity that is included in the GDP data.
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