Why China’s government might struggle to revive its economy | Mint Primer | Mint
China's post-Covid economic recovery has turned ou... moreChina's post-Covid economic recovery has turned out to be shaky rather than robust.
Initial pent-up demand was followed by economic data for April falling below expectations. China's stocks, government bond yields, and currency declined in response.
The purchasing-managers indices (PMIs) for May showed slower growth in services output and consecutive shrinkage in manufacturing activity. Falling input and output prices are hurting industrial profits, hampering manufacturing investment, and raising concerns of deflation.
The economy is facing a double-dip risk, potentially with close to zero growth from one quarter to the next. China may resort to easier monetary policy and looser fiscal measures, but some worry the government's response might be inadequate.
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