China: Will XI fire the stimulus cannon?
With sluggish domestic demand and increasing youth unemployment, last week's Politburo readout was noticeable for admitting to new challenges for the Chinese economy. These include “insufficient domestic demand, difficulties in some enterprises’ operations, multiple risks in key areas, and a complex and severe external environment. Mikkel Rosenvold does not believe China will resort to major stimulus packages in the near future. Instead, we will see more limited and localized efforts within designated strategic areas, likely focused on the supply-side. The Chinese will have to work their way out of this crisis while the CCP keeps its eye on the long-term goal of keeping public and private debt under control.