Expect no massive stimulus in China – Arthur Kroeber

 

Economist Arthur Kroeber is not expecting a significant stimulus of China’s economy as the central government has done in the past. The government is instead hoping the economy will outgrow the current post-Covid-19 dip without massive intervention, he says at CNBC.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

Stimulus will remain in China's tool box - Victor Shih

Victor Shih

China's government seems eager to control debts, even when it means a mitigation of economic growth. But the financial stimulus will remain a trusted tool in the country's financial toolbox, in case growth drops too far, says financial analyst Victor Shih at the Deutsche Welle.

The Deutsche Welle:

Experts say the Chinese government needs to slow down the pace of infrastructure investment if it wants to resolve the debt problem. But they doubt that the government is willing to push ahead with such a measure. 

"Because it [infrastructure investment] already is a large contributor to growth, slowing investment will substantially reduce growth rates," said Victor Shih, an associate professor of political economy at the University of California in San Diego. "This is not what the leadership wants."... 

Analyst Shih believes that once China's economic growth drops to a certain level, Beijing would again resort to stimulus to boost expansion. "I still think that if growth falls below a certain level, the top leadership will order a stimulus, which involves acceleration in debt growth," said Shih. "That is the only viable tool in China's arsenal if the economy slows too much."

More at the Deutsche Welle. 


Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more financial analysts at the China Speakers Bureau? Do check out this list.  

Reform is more needed than a financial stimulus - Sara Hsu

+Sara Hsu 

The People´s Bank of China, the central bank, recently pushed 100 billion Renminbi to its five largest banks to stimulate the economy. But China´s economy rather needs reforms than more capital, argues financial analyst Sara Hsu in the Diplomat.

Sara Hsu:

If China’s economy is to be restarted, it will need more substantive reforms. Labor-intensive manufacturing companies are facing rising costs, including increasing wages, and are moving abroad or diversifying to Malaysia and Vietnam. Chinese workers are becoming more sophisticated and consumption-oriented, seeking higher wages and better opportunities. The leadership is in favor of improving the services and high-tech manufacturing sectors, but appears to be stalled in lifting constraints to growth in these areas. 

These constraints abound. In the logistics sector, state-owned enterprises dominate port, rail and air delivery services. The state-owned logistics sectors spans the nation and enjoys an advantage in more regulated logistics areas, such as rail cargo transportation. Similarly, China’s telecommunications industry is dominated by three state-owned enterprises. 

Although these state-owned enterprises have recently allowed private enterprises to lease networks, cooperation with private businesses fails to break up the monopoly enjoyed by these large state telecommunications companies. Finally, barriers to growth in creation and manufacturing of innovative high-tech products include a lack of protection for intellectual property rights. Lack of enforcement of intellectual property rights ensures that innovation by private firms may be easily usurped by imitators who produce the same products. 

To combat its own malaise, China needs real reforms in targeted industries. In general, the state sector remains too pervasive, and challenges to the growth of private sector enterprises are difficult to surmount. In contrast to what other analysts have asserted, the reform process does not have to be stalled in order to combat slowing growth. Slowing growth can only be addressed in a meaningful way by changing policies to promote employment and the expansion of particular sectors. Economic resuscitation and long-term growth need not, and should not, be mutually exclusive.

More in the Diplomat.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you interested in more financial experts at the China Speakers Bureau? Do check out this recent list. 

Related articles

• Battling illegal fundraising in China - Sara Hsu
• New policy: registering real estate - Sara Hsu
• China´s unpredictable GDP growth - Sara Hsu
• The changing state-owned enterprises - Sara Hsu
• China's Gargantuan Corporate Debt
• China's Slowing Fixed Asset Investment