Talk of a new stimulus package in China produced a 4% rally in the Shanghai Composite in the space of two days earlier this month. The turnaround was triggered by the government’s announcement that it had approved a large number of investment projects. But hopes that these projects might provide a boost to economic growth have faded. A closer look showed that this was not “new” spending – most of the projects had long been expected to happen anyway. Furthermore, the project approvals had actually been granted over a period of several months, and spending on them will be spread over several years. Equities have now given up half of their earlier gains.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services