Visiting customers, officials and other economists in Hong Kong and Singapore in the past week, three insights about China were clear.
Firstly, there is a strong degree of confidence that China will implement stimulus packages to stabilise the economy following the slowdown in growth over the course of 2018.
The second big issue is around trade policy.
Clearly, there is great degree of uncertainty as to exactly how the trade negotiations with the US will get resolved and few people were particularly confident a compromise is in sight in the near term.
Finally, China seems to be heading towards a current account and trade deficit. The concern would be if China tried to take some direct steps to deal with that problem, particularly around students and tourists, which could be damaging to Australia’s economy if growth in arrivals slowed.
Given the size of China’s economy and Australia’s close trading relationship, how these developments unfold will be important in 2019.
This material contains general commentary, and market colour. This material does not constitute investment advice. This information has been prepared without taking account of your objectives, financial situation or needs. We recommend that you seek your own independent legal or financial advice before proceeding with any investment decision. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts. Except where contrary to law, Westpac and its related entities intend by this notice to exclude liability for this information.
William (Bill) Evans is Westpac’s economic spokesman and is responsible for all of our economic research. In 1991, Bill joined Westpac as the Chief Economist and Head of Research. A graduate of Sydney University (BEc. Hons I and University Medal) and the London School of Economics (M. Sc.), Bill has worked as Research Manager for the Reserve Bank of Australia and as a Treasurer at the Commonwealth Bank of Australia. Bill travels frequently, advising Westpac’s customers on the Australian economy and financial markets.
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