ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print
Economy

Tom Rafferty: Don't hold your breath for a Chinese stimulus rescue

Global financial markets have been rallying after a difficult few months. Oil prices have bounced back to around $40 a barrel and iron ore prices rose by nearly 20% on a single day in March. Partly driving these gains are expectations that fresh fiscal stimulus in China will help to lift demand in the world's second-largest economy.

     Claims that China is set to embark on fiscal stimulus do not stand up to close scrutiny, however. At the recent meeting of the country's legislature, Premier Li Keqiang did reveal that the government this year is targeting a bigger fiscal deficit, equivalent to 3% of gross domestic product. This compares with a published deficit of 2.4% in 2015 and, if realized, would mark the widest official shortfall since 1979. The government wants economic expansion to reach 6.5-7% in 2016.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more