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Will China’s slowdown derail reforms?
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China's economic slowdown has pushed policy makers toward stimulus measures, spurring analyst concerns about whether long-sought reforms may fall by the wayside. "While structural reforms remain at the top of the policy agenda, the recent cyclical slowdown has made advancing them less urgent than was the case six months ago," Barclays said in a note Tuesday. "There is no clear indication of how fast this area may progress in the short term, except around combating corruption, where the government has highlighted it will do 'whatever it takes.'" China has been pursuing reforms to shift its economic model away from labor-intensive and export-oriented manufacturing, which has been dependent on continuous credit growth, and toward one more reliant on private consumption, services and the private sector. Chinese firms most upbeat in a year. Reforms have targeted a wide range of issues, including corruption, a troubled property sector, non-performing lo...
Did lower oil prices help the economy at all?
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The oil price plunge has been touted as a global growth elixir, but so far the impact on the economy has been subtle and it's unclear when that will change. "Local fuel prices have almost fully adjusted to lower crude oil prices," Goldman Sachs said in a note last week after tracking data from 24 countries. But it expects the stimulus impact on the economy won't be straightforward, depending on whether low prices are perceived as likely to persist and government policy responses. "Income gains of households might not necessarily translate into significant spending rises," it said, adding that corporate gains would likely be reflected more slowly. For companies, "the price pass-through mechanism is quite complex, with oil windfalls spread out to dividends, wages, and retained earnings, not necessarily spilled over directly to consumers via lower retail prices," Goldman said. "The use of oil is also quite diverse, entailing transportation...