Reframing Growth Targets

Chinese policymakers are finally more concerned about limiting financial risks than maintaining a façade of stability with contrived GDP growth targets. Therefore policy will maintain a tightening bias in 2017. With formal credit growth targets likely set lower this year and informal credit channels squeezed by tighter conditions in China’s money markets, reflationary pressures appear weak, and may give way to deflationary pressures and slower growth in the quarters ahead.

Posted August 1, 2017
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