Our Thoughts on the Chinese Economy

China’s latest stimulus measures were announced in early November.At RMB10trillion, USD1.4 trillion they seem to be aimed at supporting the economy in the face of the threat of increased tariffs from the US. The measures seem, however, to be essentially debt restructuring rather than an outright stimulus. In particular, large and opaque off balance sheet borrowing by local authorities, much of which has turned bad as a result of property price weakness, is being formalised and refinanced.