It should come as no surprise that China’s economy is expected to tank in the first quarter of 2020. Goldman Sachs Group has changed China’s GDP growth projection for 2020 from 5.5% to 3%, as disappointing retail, industrial output, and investment data has surfaced in recent days, according to Bloomberg (porous paywall).
Chinese news platforms, however, are focusing less on their own economy, and more on the possible U.S. recession, on the U.S. stock market rout (in Chinese), and on individual industries struggling amid the economic slide.
China’s stock markets are down only 2%, despite the Chinese economy having been on complete lockdown for months already. This number does not reflect investor sentiment; it represents government intervention. (See the Financial Times: How the invisible hand of the state works in Chinese stocks, paywall).
The question is: Can Beijing continue to sustain this gap between economic reality and managed stock market fantasy?
—Caroline Stetson and Jeremy Goldkorn