BNP Paribas Asset Management reserves some doubt about China's ability to bolster its economy
The firm's head of EM fixed income, Jean-Charles Sambor, says that the NPC announcement earlier was "relatively balanced" as it focused more on tax cuts rather than infrastructure projects. Adding that it is "good that China is not targeting a very high growth rate" but instead is "focusing on very good quality growth".
That said, the firm still has some doubts about China's fiscal plan as they note that said measures may disappoint as the risk that growth will continue to slow remains because the stimulus could be insufficient.
Commentary aside, China is really pulling off all the stops here to help support its economy. The fiscal measures here go alongside the RRR cuts we have seen over the past two years. And if that still isn't enough, expect those concerns to reverberate globally across markets over the next year or so.
