Apr
02

Borrowing Beijing

With growth in China slowing substantially and Chinese leaders still slavishly forecasting 7.5% GDP growth, expect Beijing to step in and support the economy with aggressive fiscal stimulus. The problem, increased reliance on debt and infrastructure spending along with the easing of lending standards prevents the economy from becoming consumer driven. Worse, the economic boost from each successive round of debt spending falls. A better solution, lose the GDP target.

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