China’s Bottom-Line Growth Remains Ambiguous: Macquarie

Investors were closely watching the words of China’s top leaders last week. Investors were thrilled by Premier Li Keqiang’s comments that China should maintain the “bottom line” of economic growth and employment. The market interpreted the “bottom line” as a 7.5% growth target and speculated a round of “moderate stimulus” especially after disappointing trade numbers in June (exports -3.1% YoY, imports -0.7%).

Macquarie Group Defining China’s Bottom-Line Growth

According to Macquarie Group, the definition of China’s bottom-line growth remains ambiguous and is biased to the downside. Minister of Finance Lou Jiwei was quoted as saying that China could achieve 7% (rather than 7.5%)...