Private firms continued deleveraging and increased investment in only a few sectors; private investment may take longer to recover broadly.
Continue Reading
China’s rapid recovery from the Covid pandemic in Q1 has outpaced market expectations and is on track to continue doing so.
Beijing is building an alternative residency permit system that will provide social services and make hukou less important in many cities.
Full year GDP growth is likely to be closer to 6.5% than 6%, and denialists may well have to change their minds.
Beijing has outlined an ambitious plan to make SOEs more competitive in the stock market.
Authorities have made efforts to boost confidence in the private sector by adjusting enforcement policies and clearing misinformation.
Power demand is likely to surprise on the upside as the economy recovers; Beijing’s moves to accelerate liberalization of the electricity market mean more volatility.
Chinese policymakers may see the banking crises in the West as the result of policy errors in recent years and will avoid massive fiscal or monetary loosening.
China has shown decent growth in the first two months, but confidence remains a big issue.
Despite a conservative GDP growth target and budget deficit, we maintain that growth can reach 6% this year.