CHN - China: Buying Time Is Not Cheap
While China should again contribute around 1 percentage point to global growth in 2020, we found on our latest research trip to Beijing that secular risks remain biased to the downside.
In prioritizing stability over all other objectives, China is borrowing from future growth while reducing policy ammunition to counter unexpected shocks. Given the renewed rise in already high debt levels, growing fiscal deficits and declining foreign exchange reserve coverage of monetary liabilities, we judge that it is becoming increasingly costly for China to buy time. Our macro conclusions, based on discussions with government policymakers