Or at least, such seems to be the take of China’s two top policy makers, President Xi Jinping and central-bank chief Zhou Xiaochuan.
Speaking Saturday, President Xi said (according to the state-run Xinhua News Agency): “China is still in a significant period of strategic opportunity. We must boost our confidence, adapt to the ‘new normal’ condition based on the characteristics of China’s economic growth in the current phase and stay cool-minded.”
Rather, President Xi appeared more concerned with the prospect of further downside for China, saying the government should focus on addressing risks to growth and on “maintaining stability in economic work.”
Xi was speaking during a tour of Henan province, but back in Beijing the tone wasn’t any different, with People’s Bank of China Gov. Zhou saying economic policy should stay stable, and no massive stimulus should be taken at present.
This is no doubt a let-down to some in the market. It seems that, lately, no disappointing data set can go by without several analysts saying the ugly numbers make further stimulus more likely.
But while China has offered a series of “mini stimulus” measures (more railroad investment and spending on housing, for instance), Xi and Zhou appear to be broadcasting that the bazooka will remain stored in the closet for the time being.
And note too that these remarks come just ahead of China’s April data for retail sales, industrial output and urban investment, all due tomorrow. This might not be a coincidence, with Xinhua reporting that “Zhou urged … more accurate judgment about the present economic situation, arguing that short-term economic figures may not be sufficient to help come to conclusions.”