Bloomberg Daybreak: Asia Edition
Charting China's Economic Road Ahead
Mar 6, 2025
Katia Dmitrieva, Asia Economy Reporter for Bloomberg News, offers a deep dive into China's shift from investment-led to consumption-led growth, highlighting Premier Li Qiang’s emphasis on boosting consumption by 2025. George Cipolloni, Portfolio Manager at Penn Mutual Asset Management, discusses the US labor market's slowdown, addressing implications for monetary policy and hiring trends. The conversation navigates the challenges of rising debt in China and the impact of tariffs, painting a complex picture of future economic landscapes in both countries.
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Quick takeaways
- China is shifting from investment-led to consumption-led growth, with authorities emphasizing the need for consumption to boost the economy.
- Rising fiscal deficits alongside an increased focus on defense spending create complex challenges for China's economic growth amid U.S. trade tensions.
Deep dives
China's Growth Ambitions Amid Tariff Challenges
China's President Xi Jinping aims for a growth target of around 5% this year despite ongoing trade tensions with the U.S. The government's fiscal deficit target has been set at 4%, indicating a willingness to spend significantly on various programs, including pensions and medical insurance subsidies. However, analysts predict that the actual growth may be closer to 4.5%, signaling skepticism regarding the government's optimistic outlook. To stimulate consumption, authorities may need to introduce a broader range of measures, especially if external pressures, such as new U.S. tariffs, intensify.
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