Oliver’s Insights – China’s turn:
This note provideed by AMP looks at the recent outbreak of worries about a hard landing in China. The key points are:
• Slowing exports, tight credit and a slowing property market suggest the risks regarding China have increased. Policy makers may also be slow to respond, resulting in further short-term uncertainty.
• However, so far there is no sign of a hard landing and while there are likely to be bouts of uncertainty, it is unlikely thanks to spending on social housing, solid consumer demand &and a likely easing in economic policy late this year or early next. But don’t expect a re-run of the 4 trillion Renminbi stimulus that was seen in 2008-09 as public debt is higher today and it was ultimately overkill anyway.
• Chinese shares are cheap, but require monetary easing before their fortunes turn decisively.
Read more here: Olivers-Insights – Chinas-turn