Challenges of China's Economic Stimulus

China's recent economic stimulus measures aim to counteract a slowing economy impacted by high deflation and low consumer confidence. Despite reductions in interest rates and support for the property sector, there is skepticism about the effectiveness of these moves due to businesses' unwillingness to borrow in a pessimistic environment. Many firms are hesitant to invest while they perceive a gloomy future, as seen in the real estate market where households with significant wealth tied to property assets feel the negative impact of declining prices. The approach seems focused on setting a floor for the economy rather than igniting significant growth, reflecting a cautious strategy from the Chinese leadership.