Behind the Money
China’s economy braces for Trump
Nov 20, 2024
Joe Leahy, the China bureau chief for the Financial Times, sheds light on the current struggles of the Chinese economy, marked by a potential deflationary spiral. He delves into the impacts of Donald Trump's election on China's growth ambitions, as well as the government's response through new stimulus measures. The discussion also covers the pivotal role of local governments in economic revival and the challenges posed by diminished consumer confidence amidst a real estate crisis. Leahy emphasizes China's need to balance global competition with domestic priorities.
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Quick takeaways
- China's implementation of a substantial monetary stimulus package aims to revive its struggling economy and bolster consumer confidence post-COVID.
- The potential re-election of Donald Trump raises concerns about increased tariffs, complicating China's efforts to achieve its long-term economic goals.
Deep dives
China's Economic Challenges and Stimulus Response
China's economy has faced significant challenges, including a real estate slump and the effects of prolonged COVID-19 lockdowns. As local governments struggled to pay salaries and debts, citizens across various income levels felt the economic strain. In late September, the Chinese government announced a substantial monetary stimulus package, marking its first major push since the pandemic. This announcement resulted in a dramatic surge in the stock market, indicating a renewed interest from retail investors after years of decline.
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