Monetary Matters with Jack Farley China Fights Its Doom Loop | Leland Miller on Mammoth Stimulus From People's Bank of China
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Sep 28, 2024 Leland Miller, co-founder and CEO of China Beige Book, provides sharp insights into China's recent market rally driven by central bank stimulus measures. He analyzes how these moves may stabilize rather than stimulate the economy. The conversation also covers the challenges facing the credit market, including rising delinquencies and the troubled real estate sector. Miller highlights the concerning decline in Chinese startups and the effects of trade wars on the semiconductor industry, painting a complex picture of China's economic landscape.
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China's Stock Market vs. Real Economy
- The Chinese stock market's recent rally is driven by government intervention, creating a short-term positive outlook.
- However, this market performance is historically disconnected from the real Chinese economy.
Ineffectiveness of Rate Cuts
- Despite several interest rate cuts in China, borrowing remains at all-time lows.
- This suggests that monetary policy alone won't stimulate the economy due to low business confidence.
China's Property Market Support
- China's government will support the property market to stabilize it, not to stimulate a recovery.
- Xi Jinping aims to deleverage the property sector, making it less central to the economy.