Macro View

Stimulus required

  • Published 12 Jan 2012

Though a repeat of the muscular Rmb4.0tn stimulus package seen in 2009-2010 is now hardly possible, the need for Beijing to inject extra vigour into consumer spending, exports and even fixed asset investments is slowly becoming clearer.

As expected, (CC Dec 22 2011, Macro View) property investment is starting to decline, leading to a series of knock-on effects in the cement, steel, glass and home decoration sectors(see Capital Intensive China). Meanwhile, consumer spending appeared to ebb just a little in December, according to China Confidential’s survey of 600 urban middle class respondents in 134 cities. Discretionary and credit spending moderated slightly in December when compared with November, the survey showed. The majority (64%) said that their discretionary spending had increased in December YoY, which was down from the 67% in November, and nearer to levels seen in October of 62%.

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