China Authorities See Downside Growth Risks, Westpac's Cheung Says

The video discusses China's recent fiscal stimulus measures aimed at supporting market liquidity and promoting loan growth. These measures are seen as a response to downside growth risks, partly due to ongoing trade tensions. The discussion covers the impact on risk sentiment and market volatility, the shift in policy towards a more gradual deleveraging path, and the challenges in expanding formal credit amidst a crackdown on shadow banking. The video also explores China's economic strategy in the face of trade tensions with the US.

What recent measures have Chinese authorities taken to address market conditions?

• Increased tariffs on US goods

• Support for money market liquidity and credit

• Expansion of export subsidies

• Reduction in interest rates

What is the current approach of China towards deleveraging?

• Rapid and aggressive deleveraging

• Complete halt to deleveraging

• Focus on increasing shadow banking

• Gradual path for deleveraging

How has the shrinking of shadow banking affected the formal banking sector?

• Increased reliance on foreign loans

• Need to absorb more loan demand

• Decrease in overall lending

• Shift towards cryptocurrency investments

What challenges do banks face despite the provision of liquidity?

• Lack of government support

• Excessive foreign competition

• Reluctance to buy low-rated bonds

• High inflation rates

What strategy might China employ to counteract trade tensions with the US?

• Match tariffs by quantity

• Focus on domestic consumption

• Increase imports from the US

• Mitigate downside risks to growth