China: new global locomotive or old-fashioned asset bubble?
| 24 August 2009 |
| PAM Perspectives Q3 2009 The financial crisis and the ensuing global slowdown caused a sudden slump China’s export performance which quickly led to slower growth and rising unemployment. The authorities soon responded with a USD585 billion stimulus which has caused a surge in activity. |
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GDP expanded 7.9 per cent (YoY) in the second quarter, while the Shanghai Composite index has doubled between its November 2008 low and the end of July 2009. Can China sustain such growth and provide an engine for global recovery, or is the action by policymakers leading to a new asset bubble? |
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