The fiscal plans unveiled by China’s leadership today are as expansive as those in 2009 but credit growth will remain far more constrained. The focus again is overwhelmingly on measures to boost investment, primarily infrastructure. We expect stimulus to succeed in lifting growth in the near-term – China should emerge from the coronavirus downturn faster than other major economies. But another wave of state-mandated investment will only cement China’s structural economic problems more firmly in place.
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