China Q2 CPI is due today. Here’s a couple of articles from the past 24 hours or so discussing the various forms of stimulus being fed into the Chinese economy. Like I said, these are from the past 24 hours or so, so not new news, but something to mull over.
First up, from Bloomberg: China’s Local Governments Pile On Stimulus Undeterred by $3 Trillion Debt
- China’s regional governments are starting to pull out their own stimulus cards
- Northern Hebei province (4.2% Q1 expansion – less than half that of a year earlier) is to invest 1.2 trillion yuan ($193 billion) in areas including railways, energy and housing
- Heilongjiang province (2.9% – China’s lowest in the first quarter) to spend more than 300 billion yuan over two years in areas including infrastructure and mining
(More detail at the link)
Then there’s this, from the (The Wall Street Journal is often gated, so if you’re unable to access the article try a search of Google news using the headline): China’s Credit Growth Offers Encouraging Signs for Economy
$174.2 Billion in New Yuan Loans Were Issued in June
- China is injecting significantly more money into its economy, which could signal support for stronger economic growth in the second half of the year, even as it raises longer-term questions about rising debt levels and the slow pace of reform
- double-digit expansion in new loan and money supply data in June announced Tuesday, exceed economists’ expectations
Says HSBC economist Ma Xiaoping:
- “Turning on the credit floodgate is aimed at supporting economic growth, which faces increasing downward pressure. Those infrastructure projects announced earlier in the year also need to be funded.”
Citibank economist Shuang Ding:
- “Second half growth should be higher than the first half. But the trend after that will be to gradually reduce credit growth. It’s a tough balancing act.”
More detail at the link (but, like I said, gated).
