Xi Has Finally Realized What’s Ailing China
The latest stimulus package signals a technocratic shift within the government.
Storm clouds are gathering over China’s economy.
Photographer: Cheng Xin/Getty Images
Once bitten, twice shy. The supercharged stimulus measures China’s top leaders announced in recent days has left many investors unconvinced. After all, Beijing has been vowing to revive growth with rate cuts and special lending programs for months — to little avail. The property market is cooler than ever, producers’ deflation is entering a third year, and youth unemployment hit a record high again.
Investors have been asking me how this round of stimulus is different: Is it the whatever-it-takes moment for China? Has the economy gotten so bad that it finally hit Beijing’s pain point? Now that FOMO, or fear of missing out, is kicking in, global asset managers are once again debating whether the government has the will, the competency, or the fiscal space to restore economic confidence.