A slowing China doesn't need more stimulus

New data calls into question the assumption that China’s slowdown necessitates large-scale stimulus. Even if Beijing chooses this path, it's unlikely to work as intended.

Even with Monday’s 7.6 per cent decline, China’s stock market is on a historic tear, having risen more than 50 per cent over the past year. Yet much of this investor frenzy is based on three flawed premises: that China’s decelerating growth necessitates stimulus, that such stimulus will reduce borrowing costs for firms, and that lower borrowing costs will incentivise spending and ultimately jump-start growth.

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