We wouldn’t take this week’s pledge from the Politburo to tilt stimulus towards consumption at face value. The only concrete measures along these lines that have been announced recently have been more funding for an appliance and auto trade-in scheme that is primarily designed to help sectors that are struggling with overcapacity. Policymakers do appear concerned about the near-term outlook and are likely to provide more fiscal support but, as usual, they’ll be pulling on the lever marked “investment”.
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