With production up a weak 11.4% in September and with other signs that the economy is weaker than the 9% Q3 growth rate suggests, especially in south China's boomtown Shenzhen and the rest of Guangdong Province, the government is readying a fiscal/monetary stimulus package that includes infrastructure projects, some tax reductions and export subsidies for textiles and toys, higher energy prices, lower interest rates in a series of three or four cuts of 27 bp, a 100 bp reduction in the bank reserve ratio and increased lending as well as efforts to stabilize the housing sector through a cut in transaction taxes.
Even if it sounds boring from my ongoing repetition, I will say it again: global decoupling is a wish and not a reality. Too many countries are dependent on the US for the marginal growth that allows them to grow in excess of their long-term potential and, in some cases, avoid a recession. In China's case, there is a recession in its largest export market and even if Europe is not yet in a broad recession, its second largest export market.
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With production up a weak 11.4% in September and with other signs that the economy is weaker than the 9% Q3 growth rate suggests, especially in south China's boomtown Shenzhen and the rest of Guangdong Province, the government is readying a fiscal/monetary stimulus package that includes infrastructure projects, some tax reductions and export subsidies for textiles and toys, higher energy prices, lower interest rates in a series of three or four cuts of 27 bp, a 100 bp reduction in the bank reserve ratio and increased lending as well as efforts to stabilize the housing sector through a cut in transaction taxes.
Even if it sounds boring from my ongoing repetition, I will say it again: global decoupling is a wish and not a reality. Too many countries are dependent on the US for the marginal growth that allows them to grow in excess of their long-term potential and, in some cases, avoid a recession. In China's case, there is a recession in its largest export market and even if Europe is not yet in a broad recession, its second largest export market.
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