"Citi: China to slow to 5-6%"
From MacroBusiness:
From Citi today comes a nicely reasoned base case for China:
A tricky path, with cliffs on both sides – With a painful
correction unfurling in the domestic property/construction sector,
China officials are likely to accept stimulus risks and focus on
cyclical policy measures to manage economic growth downside, with
targeted actions to increase property demand while keeping monetary
and credit conditions accommodative. A mild growth rebound is likely in
2H, but could be transitory, and we expect further moderation in 2015.
More policy easing, including policy rate cuts in 1H15, looks likely to
avoid risks of slipping into a hard-landing. Structural reform is
meanwhile not forgotten, and the pace of reform has picked up a bit
recently with a rough timetable of hukou, fiscal and SOE reforms
emerging – but these measures are unlikely to be near-term
game-changers, and structural reform initiatives will be taken slowly,
cautiously.
At a structural inflection point – International experiences suggest
that GDP growth rates are often halved once GDP per capita hits the 10k
international dollar mark. China is right at this inflection point....MORE
