Don’t Beg for Stimulus From China’s Chronic Procrastinators
The timing for massive easing in China is not right. Investors need to stay away from companies with immediate cash needs.
A tricky time.
Photographer: Raul Ariano/BloombergChina’s recent economic data has been so bad that it’s spurring calls for large-scale stimulus. Big numbers, such as 1 trillion yuan ($138 billion) special government bond issues, have been thrown around. But so far, Beijing is holding fire, disappointing global markets.
The economy is clearly taking a double-dip downturn, only seven months after reopening from Covid lockdowns. In June, residential real estate sales for top developers resumed their decline, an ominous sign out of the traditionally busy season. Expansion in the services industry, a relative stronghold, slowed as well. One out of five young people are unemployed as we enter the college graduation season.