China’s slowing growth trend is strong

The Chinese government has put in place a powerful stimulus package fuelled by credit and the fiscal deficit. However, we note that Chinese growth remains subdued (it s level of course remains high) and continues to fall despite this considerable stimulus. In the short term, the trade war with the United States has a negative effect on confidence. Beyond that , however, there are structural factors weakening growth in China: Population ageing; Inefficient use of some savings; The gradual disappearance of low-end industries; Rising labour costs.