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Why China’s surprisingly strong economic growth isn’t sustainable
China is recovering from the impact of Covid-19, but the detail suggests that GDP growth of 3.2% year-on-year in 2Q20 may not be sustainable despite improvements in foreign demand and infrastructure investments. However, we do now expect better growth numbers than our previous forecasts. GDP growth of 3.2% YoY in 2Q20 looks very good after a 6.8% YoY contraction in 1Q20, and is a lot better than our expectation of -3.1% YoY. But we doubt that the main sources of growth were just inventories and net exports - which were lower because of slow import growth. We see this as unsustainable as we expect imports to grow ... (full story)
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