UBS on what it'll take to fix China, from the firm's chief China economist:
- "While using national funds to buy blue-chip stocks might support equity markets in the short term, what is really needed are measures to revive the economy, raise corporate earnings and restore business and household spending,"
- "Next week's National People's Congress would be a good time to announce such measures."
Recommends (in brief):
- government-led debt restructuring
- new growth model that leans less on debt investment and more on innovation and consumption
- stimulus of at least 2% of GDP to subside consumption, encourage spending
- "Further interest rate cuts and liquidity injections would help lower the mortgage and corporate debt service burden and, together with looser credit policies, drive credit demand."
The Financial Times carried the article, gated, but there is ungated summary here.
