Please register and get access to full articles.
Welcome to our blog – a place to discuss and exchange thoughts and ideas about iX-7 Asset Management SA, the stock markets and all matters relating to wealth management.
On the back of COVID restrictions, the worst heatwave in 60 years, a slowly unfolding real estate crisis, and US sanctions focusing on technology parts, China’s economic growth forecasts have been downgraded further. And things may become worse before better, as the heatwave is adding unexpected strain to the economy, with some major provinces requesting the shutting down of factories to save power.
While the disruption from the power shortages will most likely affect only some regions, there has been a resurgence of COVID reported in 41 cities (that generate 32% of China’s GDP). This is the highest number reported since April, and expected growth rates going forward will most likely remain below average.
Given these mounting concerns, the country’s top leaders were relatively modest last month when commenting on the growth outlook by stipulating a 5.5% growth rate. One can expect that a government would want to shine and therefore set a go-getting target, but 5.5% seems just the opposite. One can only wonder whether this is actually the ambitious target. If so, then the expected figure should be much lower.
Knowledge is power.