China’s long problems to resurface in 2016
PNC Financial Services Group is staying cautious warning of a “perfect storm” that could surface by 2016, beside the recent positive data from China.
Stuart Hoffman, chief economist at Financial Services Group wrote in a report this week,
“Several problems long on China’s back burner are likely to come to a head by 2016”
Stuart Hoffman’s report is citing challenges including a weakening credit market, a slowdown in corporate reinvestment of earnings and a correction in the all-important housing market.
China’s goverment measures began to pay off and rising from 7.4 in the first three months to 7.5 in the second quarter.
These headwinds could slow Chinese real GDP (gross domestic product) growth to around 6.0 percent in 2016, the slowest since 1990, the firm noted.
The same time, John Zhu, China economist at HSBC doesn’t foresee a dramatic deceleration to 6-percent growth levels.”A lot of economic analysis tries to extrapolate micro-level analysis to the macro-level. There are so many other variables and policy levers that could be pulled,” said Zhu, who expects growth will hover above 7 percent over the next couple of years.
Source: cnbc
