China has come out with a string of policies that are targeted to reinvigorate economic growth. Some of the policies are adding leverage to the government’s balance sheet. A question that investors are asking is: how much more will China realistically spend to stimulate the economy?
So far, these policies have focused on shoring up demand - unlike after the financial crisis, when China spent trillions of renminbi to expand supply. That is an importance difference because it implies policymakers remain disciplined in the way they choose to manage debt.
Marty Dropkin, Head of Equities, Asia Pacific, asks Fidelity International’s Director of Research for Fixed Income, Asia Pacific, Bich Nguyen, and Fixed Income Portfolio Manager, Tae Ho Ryu, about how investors should approach the issue.
With an additional contribution from Portfolio Manager Olivia He.
This episode was recorded on September 12th, 2024, before the most recent policy measures were announced.
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Read a summary of this episode here.
Read our analysis on how China keeps its debt in order here.
For a more in-depth take on China’s bond market, listen to the previous podcast episode on the renminbi here.
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