Will Xi Jinping’s second term bring ‘new cycle’ for the economy?
Now that the president has cemented his grip on power, some economists say China will turn a corner towards stable and more sustainable growth
A growing number of economists are joining the chorus forecasting the arrival of a stronger Chinese economy under President Xi Jinping – a stark contrast from a year ago, when China was seen as a source of instability for the world.
Although Beijing has delivered scant evidence that it is taming its debt mountain, the optimists are starting to make their voices heard over talk of a hard landing or crisis in China’s growth narrative.
Moody’s Investors Service, the rating agency that five months ago downgraded China’s sovereign rating, said in a report last week that Xi’s second-term power consolidation “could advance the process of economic reform and rebalancing”.
That view was echoed by Michael Pettis, a long-time observer of the Chinese economy, who told the South China Morning Post that a strong leader would help China to clean up its debt mess and put growth on a sustainable track.
State-backed investment bank China International Capital Corp meanwhile wrote in a note on Monday that the bears were wrong “again and again” about China because they did not understand the country’s vast potential to grow. It said fears about a bust in China’s debt-fuelled growth were overblown.