CHINA, despite all the discussion about the beneficial impact of new economic stimulus, remains in my view trapped between an economic rock of being unable to significantly boost domestic consumption and the hard place of a more difficult export climate.
The rock of raising domestic spending
Until or unless China fixes weak healthcare and pension systems – and maybe also does something to give rural migrants to urban areas better job opportunities and wages by changing the Hukou residency system – the growth in domestic spending is unlikely to be at the levels we saw during the 1992-2021 Petrochemicals Supercycle.
Savings rates in China hit a new record high in China last year, the Wall Street Journal reported in its 12 January 2024 edition: $19.13 trillion. That’s how much Chinese households had stashed away in savings by the end of 2023, hitting yet another…
