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As China Delivers Official 2019 Growth Target, Here’s Some Context And Color
The annual National People’s Congress is underway and we now have the official announcement on China's economic targets for 2019.
The GDP growth target for this year is 6%-6.5%. M2 will be in line with nominal GDP growth and you can expect a tax and fee cut of 2 trillion yuan versus an 800 billion yuan target a year ago.
China has set the 2019 budget deficit at 2.8% of GDP compared to 2.6% in 2018 and Beijing plans a 3ppt cut to the top VAT bracket.
Leverage will be kept “basically stabl
“Analysts and market participants have spent the last two months relentlessly parsing the data for signs of a bottom”
These comments make me laugh. China’s economy will certainly continue to increase, but they are already the 2nd largest on the planet. These analysts expect what, exactly? China’s economy will continue expanding at 10% annually, doubling every 7 years? C’mon, everyone knows shits already stretched in China and their semi-dire credit situation doesn’t help at all.
No, we are not seeing a bottom, but simply the natural evolution of an advanced economy. Growth rates will continue to gradually decrease as the economy becomes more service oriented. Already they have higher GDP in PPP, and I expect the PPP adjusted numbers is what will compensate for the huge population.
As my old father used to say, right before he gave me a billion in used notes, “if it looks too good to be true, it probably is”. Take another glance at this current ‘rally’ guys.
If you would get a one billion dollar reward for guessing the actual Chinese GDP growth rate right now, what would your guess be?
You want us to guess an imaginary number? Where the people imagining it up aren’t even sure what it is? S’rously? You’re fired.