Key points
- China’s economy is slowing not helped by a property collapse and longer-term structural constraints around poor demographics and threats to productivity growth.
- China needs to save less and spend more, and this requires significant fiscal stimulus. So far policy stimulus has been tepid, but a more forceful response is likely.
- Chinese shares are cheap but short-term risks are high.
- The risks around China’s outlook mean Australia can’t rely on the China/commodity boom indefinitely.
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