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Chinese blues

Chinese gdp was published yesterday and it was slightly lower than expected at 5.2%. The Chinese government is planing to issue an $139Bn stimulus package to help the economy recover its growth path, while fighting deflation and with a real estate sector that continues to struggle. Equity indices continue to fall In a downtrend that is going in for more than 2 years now, experiencing a $4Tn loss in valuation. Youth unemployment, which was not published since the summer, was introduced again into the package reported with a 14.9% print showing improvement vs the last print at 21.3%. China is a very important component of global growth and a key component of the MSCI EM equity index with about 25% weight. It will be difficult to see an overall EM recovery vs developed markets if China doesn’t grow as expected.

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