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“Exiting” Into Policy Headwinds in 2021

Chinese policy-makers will meet in early to mid-December to map out economic policy for 2021, and will need to manage perhaps the most complex set of conditions in recent history. Fiscal policy and credit growth will be less supportive of the economy next year. Consumption growth is the key to extend China’s recovery and make it more sustainable, requiring more consumer-focused stimulus. Debt pressures will slow growth as banks’ forbearance measures will end, governments’ implicit guarantees are weakening, and record volumes of corporate bonds are maturing.

Posted November 29, 2020
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