Foto Yahoo
By Isaac Cohen*
The Chinese economy has been exhibiting deflationary pressures. at least since the contraction in the real estate sector which started in 2021, together with a consequent increase in household savings. In August, the consumer price index increased by a meager 0.6 percent, from a year earlier. Meanwhile, government support of the manufacturing sector and exports has generated a record trading surplus. Last June, exports from China increased to $308 billion, from a year earlier, while imports decreased to $209 billion, generating a surplus that surpassed the last record set in July 2022. w.imf.org/en/Blogs/Articles/2024/09/12/trade-balances-in-china-and-the-us-are-largely-driven-by-domestic-macro-forces?utm_medium=email&utm_source=govdelivery
Last week, a meeting of the Chinese Communist Party Politburo, extraordinarily dedicated to the economy, approved a set of measures to stimulate domestic consumption. To start, most of the measures emanated from the central bank, mainly reducing mortgage rates, permitting access to abundant credit for mortgages, to buy back of stocks and to purchase unsold properties. Pending was the announcement of a set of fiscal stimulus measures, as well as how the real estate contraction will be dealt with. The announcement of the measures, last week, was greeted by the Shanghai stock market index with an increase of 11 percent, the highest in four years.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
