Investors hoping for a strong, sustained recovery in China’s economy after reopening will be disappointed by the reality.
Sentiment among Chinese consumers and business leaders couldn’t be worse, according to a senior research analyst who just spent two months there.
“Something’s totally broken,” Harbor Asset Management’s Oyvinn Rimer told Markets with Madison.
Two years of negative yields in property prices and rising cost of living meant Chinese consumers were cautious and reluctant to spend despite lockdown cash savings.
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China’s central bank, the People’s Bank of China (PBOC), cut its one- and five-year lending rates by 10 basis points last week.
Rimer said more “energetic” monetary and possibly fiscal stimulus is needed.
“The consumer probably needs 30, 40, 50 basis points of easing.”
Watch him explain above on today’s episode of Markets with Madison why China’s economy is struggling to sustain its recovery and how Beijing might respond.
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Get investment insights from the experts at Markets with Madison every Monday and Friday in the NZ Herald.
Disclaimer: The information provided in this program is general in nature and is not intended as personal financial advice. We recommend that you seek advice from a qualified professional based on your individual situation.
Madison Reidy is the presenter of New Zealand’s only financial markets show, Markets with Madison. She joined the Herald in 2022 after working in investment and has reported on business and economics for television and radio stations.
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