Editorial | Further fiscal easing is on the horizon but it will be measured
- Beijing is showing patience in gradually correcting its structural problems rather than unleashing sweeping stimulus that may only backfire
The markets scrutinise China’s monthly economic data for positive signs of a broad-based recovery. After the latest release they are still looking.
The July data are weaker than expected.
China is experiencing an unbalanced recovery, with exports thriving alongside a continuing property slump, weak domestic consumption and elevated unemployment, prompting expectations of more measures from Beijing to ensure the economy meets the annual growth target of around 5 per cent.
The central bank governor has pledged more support according to state media.
Rising trade frictions as well as negative sentiment among investors and residents have helped fuel concern with the momentum of growth.
The data is not surprising, given that it has long been accepted there are no quick fixes for the property slump, which continues to put a damper on consumer confidence. It will take time to complete an orderly restructuring of the economy.
In that respect the data looks worse because expectations are high, leading many people to anticipate that Beijing will release more support measures. They did not have to wait long for news.
