Published on Wednesday, November 17, 2021

China | Lehman Moment or Volcker Moment?

Economic slowdown will continue as the authorities are willing to sacrifice short-term growth figures to trade for long-term social equality and carbon neutrality, but it will not turn into either Lehman or Volcker Moment.

Key points

  • Key points:
  • October activities displayed a mixed picture of economic recovery amid the recent flurry of regulatory storms and growth model transformation.
  • Both industrial production and retail sales showed some resilience in October, but the investment was dragged significantly by real estate slowdown with the contagion effect of Evergrande’ default.
  • Monetary policy will be marginally eased but it does not mean a deluge of strong stimulus, while fiscal policy will be more proactive, focusing on processing local government bond issuance.
  • The authorities are well aware of the growth deceleration and will strike a balance between stimulating growth and pressing ahead structural reforms going forward.

Associated documents for downloading

  • Report (PDF) 20211117_China-Lehman-or-Volcker-Moment.pdf English November 17, 2021



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