Current economic indicators in China suggest a weakening trajectory, raising questions about the need for stronger policy intervention. After a promising beginning to the year, recent data on growth and inflation have fallen significantly short of expectations. Despite these signs, government officials have shown reluctance to shift away from their restrained approach to economic management. Fiscal measures have already been deployed to some effect, and while experts anticipate minor interest rate reductions in the coming months, these are unlikely to constitute a major stimulus. The prevailing wait-and-see stance may have been reasonable when domestic activity remained stable and U.S. trade policies were still unclear. However, with momentum faltering, Beijing’s strategy appears increasingly one of passive navigation rather than proactive correction.
— news from Bloomberg.com
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China’s Economy Needs Help, But Will It Come?
If ever there were conditions that cried out for stimulus, China appears to have met them. Recent gauges of growth and inflation were more than just disappointing. n nAfter an encouraging start to the year, the expansion is in trouble. But authorities have given little sign they are prepared to jettison the caution that has characterized their actions. Fiscal policy has already done some work and, while economists predict interest-rate cuts later this year, the reductions are likely to be modest. The wait-and-see approach could be justified while activity was holding up reasonably well and the US was figuring out just how punitive tariffs would be. Beijing seems intent to just muddle through.