Australia And The China Factor!

We look at how the changes in China’s economy might impact Australia.

Although Q1 GDP data was better than expected, some analysts are predicting that Q2 may be less forgiving. One clue is the rising unemployment rate in 31 major cities in China.

A key question is how much China’s government can offset decelerating growth with fiscal and monetary support? Another critical variable is whether the government continues to pursue a zero-Covid policy, which contrasts with much of the rest of the world, which is increasingly learning to live with the virus. By some accounts, the longer China tries to stave off widespread infection, the bigger the eventual blowback when the policy is abandoned, as some analysts predict.

The pandemic has to be the biggest source of risk for China’s growth this year. And this has significant consequences for Australia.

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Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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