The debt-fueled recovery of Chinese economy
China reported its slowest economic growth since 2009, however, a soar of new debt fuels a recovery in investment, factory activity as well as household spending.
That’s undoubtedly positive news in the near-term, though many experts think it might stand for a return to the old method employed during the financial downtime, when Beijing manually adjusted its national economy during a downtime via massive simulative measures, rather than expected structural reforms.
Friday’s official data disclosed that Chinese GDP ascended at an annual rate of 6.7% in the first quarter of 2016, easing a bit from 6.8% in the fourth quarter as foreseen. However, other indicators pointed out that new retail sales, loans, industrial output as well as fixed asset investment appeared to be better than expected.
While analysts stress that the data appears to be solid evidence of bottoming out in China’s economy’s slowdown. Some experts warn that the first quarter of 2015 demonstrated the same start when the stock market crashed.
However, the old sectors of Chinese economy are getting stabilized now.