Policy in China will return to putting growth first
Subject The economic outlook for China. Significance Downward pressure on economic growth is growing amid trade tension with the United States and the effects of a campaign to deleverage the domestic economy. The central government has made a clear shift towards looser monetary and fiscal policy to provide liquidity and stimulate business activity, implying that authorities' concerns about slowing growth are serious. Impacts Interest rate cuts and further credit injections are likely before year-end if trade tensions with the United States persist. Investments in infrastructure will facilitate technological development such as 5G adoption, with a wider impact on other industries. Infrastructure investment is back in favour in Beijing, so the Belt and Road Initiative could receive another boost abroad.