‘Broken’ - Why China’s economy isn’t recovering

Investors hoping for a strong, sustained rebound in China’s economy upon reopening will be disappointed at the reality of it.

Sentiment among Chinese consumers and company leaders couldn’t be worse, according to a senior research analyst who just spent two months there.

“Something has completely broken,” Harbour Asset Management’s Oyvinn Rimer told Markets with Madison.

Two years of negative returns on property prices and cost of living pressures were causing Chinese consumers to be cautious, and despite saving money in lockdown, they were holding back from spending.

Its central bank, The People’s Bank of China (PBOC), cut its one and five year lending rates by 10 basis points last week.

Rimer said more “assertive” monetary, and possibly fiscal, stimulus was needed.

“The consumer probably needs 30, 40, 50 basis points of easing.”

Watch him explain why China’s economy is struggling to hold onto its rebound, and how Beijing may respond, on today’s episode of Markets with Madison above.

Get investment insights from the experts on Markets with Madison every Monday and Friday on the NZ Herald.

Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.

Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.