Brave New World

Will China save the world? 16/07/2009

China’s GDP grew by an annualised 7.9% in Q2 if 2009, helped by a 4 trillion yuan ($585 billion) stimulus package that has boosted loan growth and urban fixed asset investment. The GDP figures slightly higher than market expectations and so there has been little market reaction. Chinese authorities have warned indicated that the loose monetary and fiscal conditions are likely to remain until there is more evidence of a sustainable recovery. BNP Paribas’s Hans Redeker is optimistic given that PPI data shows inflation remains a distant threat. However, he does not see China leading the rest of the world out of stagnation. The recovery of the US is still key.