China Will Face a Lot of Growth Headwinds This Year, Analyst Predicts

While ongoing trade negotiations between the U.S. and China have the capital markets eagerly anticipating a tangible trade deal, stimulus measures by the Chinese government to prop up the domestic economy are starting to take its effect.

A mix of Chinese stimulus measures have been providing the fodder for economic growth, such as lower taxes, no corporate tax breaks, monetary policy adjustments, and more market access for foreign companies to set up shop. All in all, Wall Street is looking at the Chinese government’s latest efforts as a plus for its economy and a boon for China ETFs.

Additionally, China is becoming less resistant to safeguarding its businesses, which will open the pathways to more foreign investment. Forbes reported this week that Chinese officials are meeting to discuss which sectors to give access to foreign investors.

The decision came after an extensive global consultation with a large number of international institutional investors, including asset owners, asset managers, broker/dealers and other market participants worldwide. MSCI said the proposal to increase the weight of China A shares garnered overwhelming support from investors.

In the video below, Le Xia, chief economist for Asia BBVA discusses the Chinese trade and economy outlook..

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