China’s proxy stimulus

CHINA ADVISORY - Report 25 Feb 2022 by Andrew Collier

China is avoiding a direct fiscal or monetary stimulus in favor of small-scale stimulus through proxies. In fact, Beijing is purposely withdrawing support for the property sector to avoid inflating the bubble. This may be inadequate to stimulate the economy to the degree that many investors are expecting. It also increases the non-transparency of stimulus on the balance sheet of particular state-backed companies.

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