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China Has a Dirty $1 Trillion Stimulus Secret

China Has a Dirty $1 Trillion Stimulus Secret

Publicerat av Tony Harkén torsdag, 07 mars 2019.

Another economy-boosting infrastructure binge is afoot, but you won’t find it reflected in the fiscal deficit target.

Investors trying to gauge how much appetite China has for stimulus should ignore official targets and look at local government bond issues instead.

Premier Li Keqiang set a 2019 GDP growth target of 6 percent to 6.5 percent at the National People’s Congress on Tuesday, down from “around 6.5 percent” in 2017 and 2018. While Beijing’s targeted fiscal deficit of 2.8 percent is higher than last year’s 2.6 percent, billions will be going to cuts in personal-income and value-added taxes instead of on infrastructure projects. Tax cuts work like ayurvedic medicine – it may be years before real benefits are seen. Hardly thrilling, is it?

Read more at Bloomberg - Shuli Ren is a Bloomberg Opinion columnist covering Asian markets.

Publicerat av

Tony Harkén

kina

Klockan i Hong Kong, Kina

CN - Time
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