Pantheon Macroeconomics with the note:
- Early Chinese data point to a stabilisation—at low levels— of economic activity.
- Infrastructure investment likely rose in November, partially offsetting the property slowdown.
- Prepare for a harsher crackdown on the private sector in 2022, and more infrastructure spending.
Slow and Steady in November as Policymakers Double Down
A November stabilisation is on the cards for China. Early signals from the PMIs, trade, and most recently, money and credit data, all look hopeful. A sharp rebound it is not, but it looks like the tried-and tested lever of infrastructure is being pulled, once again. Policy support is being stepped up, both on the fiscal and monetary side, as the latest RRR cut demonstrates, but don’t mistake this for a full reversal. The property sector’s glory days are firmly behind it, and to paraphrase the PBoC, floodlike stimulus is not on the horizon.
