BERNARD DROTSCHIE: China weathers tariffs storm, banks on stimulation
Current trade volatility is likely to result in subdued economic activity but stability is expected to set in eventually
China, once hailed as a global economic miracle, is now facing significant headwinds. The sharp decline in its property prices has dealt a heavy blow to household wealth and strained the financial position of local governments. Since the pandemic, youth unemployment has soared to record levels, and consumer confidence remains subdued, largely due to sluggish wage growth falling short of expectations.
In response, Chinese fiscal and monetary authorities have implemented a broad range of expansionary measures aimed at stimulating the economy. These initiatives include lower interest rates, reduced capital requirements for banks, and easier access to credit. A key metric to watch in assessing the effectiveness of these policies will be the level of credit extension by banks, alongside indicators such as employment growth, consumer confidence, and real wage improvements...
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