Welcome to the 178th edition of Trade War.
PBOC does a surprise rate cut but Chinese economy looks worse. Evergrande files for bankruptcy in the U.S. and state property companies warn of risks. Is China facing a ‘Lehman moment,’ some start to wonder.
U.S. inflation, the strong dollar, plus Chinese deflation and property woes, are helping America’s GDP growth beat China’s. But China’s slowdown and deflation to slam industries and hurt global corporate profits.
Beijing hiding all kinds of data, not just youth unemployment. JP Morgan and Barclay’s slash China growth forecasts. Washington holds trilateral meeting with the heads of South Korea and Japan. And China unsurprisingly reacts angrily.
And two takes:
“There can now be little doubt that just as the conventional wisdom way overstated the economic prospects of Russia in 1960 and Japan in 1990, so have China’s prospects been greatly exaggerated” - Lawrence Summers, former U.S. Treasury Secretary
“A careful reading of the present situation does not support the view that China's growth is now gripped by a severe cyclical downward spiral that will persist for several years”- Nicholas Lardy, Peterson Institute
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