Bloomberg Businessweek on muted impact of stimulus in China

The economy is besieged by deflation, a persistent housing market slump and a stock selloff.  And Beijing's piecemeal stimulus policies - such as lowering bank reserve requirements to encourage more lending and issuing more government bonds to fund construction projects - don't seem to be improving sentiment.

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Chinese government advisers' calls for more stimulus reached a fever pitch last summer, and Beijing responded with an unusual midyear dose of deficit spending.  While the timing signaled a welcome flexibility, the scale of the effort, at 1 trillion yuan ($139 billion), paled compared with past interventions.

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Stubbornly low confidence among households and businesses is blunting the impact of stimulus...  One sign Chinese families are feeling less secure: Rather than investing in housing or stocks, they're socking away money away in savings accounts at banks.  Companies are being showered with credit, but outside of growth sectors such as EVs and cleantech, business owners appear to be reluctant to expand amid weak demand and falling prices.

~ "China Limps Into the Year of the Dragon," Bloomberg Businessweek, February 12, 2024