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China Has More Reasons to Stimulate Economy Beyond Trade Tension

  • Credit expansion undershot, core inflation fell in April
  • Fiscal stimulus constrained by slowing tax income in Jan-April
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Trump Says China 'Broke' Trade Deal

The case for China to keep up stimulus to the economy strengthened, with further incoming evidence that the recovery is not yet self-sustaining as negotiators attempt to stave off an escalation of the trade war with the U.S.

Despite upbeat inflation and import data released in the past two days, the recovery remained fragile in April: Core consumer inflation, stripping out volatile food and energy prices, edged down. The main factory gauge pulled back, exports unexpectedly fell, fiscal income growth slowed, and new credit trailed all economist estimates.