Big Stimulus Once More?
The economic slowdown is an inevitable part of China's economic restructuring as it shifts away from bubble dependence. Any stimulus could be aimed to minimize collateral damage, not to reverse the trend by blowing up bubbles again. As China's leverage is over two times GDP and market sentiment is fragile, inflating a bubble again may spark mass selling rather than piling in. The consequence could be a speculative collapse rather than a revival.
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- News Calendar, December 5-11
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