It’s one of our favorite pop tunes, and we don’t think Sting was mulling the Chinese economy when he wrote it, the word resonates in terms of this week. The stock market plummeted more than 3% on Thursday before being somewhat resuscitated by the National Team, and it fell another percentage point today. Rumors continue to swirl about doings at the top, but we are not yet ready to declare a return of factional politics to the relatively public stage. The backdrop to that and to the stocks is economic data that is not great and indicates slowdown, exacerbated trade problems, further reports of financial option less in the provinces, Chinese companies trying to list elsewhere running into unexpected investor negativity … and a typhoon to top it off. The statements from the Center indicate they yet again faced with a choice between reform and growth, and they have no choice to go for growth. The state banks will lend more to the SOEs, and maybe even a bit to the SMEs too. And the markets will like that, for now. But it just makes the underlying problems worse. It’s an old theme, an old China story, but there it is.
For all those born beneath an angry star,
Lest we forget how fragile we are.
You must log in to post a comment.
Yes, I would like to receive emails from China Economic Review. (You can unsubscribe anytime)
Copyright © 2018 SinoMedia Group Limited All rights reserved