I pay far less attention to China’s growth numbers today. What matters more is where fiscal capacity is flowing.
China has entered a phase where population ageing, security needs and industrial upgrading all draw on the same budget. This shift follows a structural adjustment in property. Income from land sales – once a pillar of local government finance – has fallen sharply and is unlikely to return. Balance sheets will have to be reset.
The question is no longer how much stimulus Beijing can…
China’s real constraint is where to direct limited fiscal resources
