China Needs Local Governments to Spend Now to Hit GDP Target

The Chinese Ministry of Finance is trying to get local government to smooth out its spending patterns while the country is going through a controlled economic slowdown, Societe Generale’s China expert Yao Wei explained in a note. Spreading out some of the normally spiky Q4 growth will make it easier for state officials to maintain a bottom line 7 percent growth rate.

As the Chinese economy hits the state’s target of 7.5 percent growth, some people have been wondering what the lowest growth rate the government there will allow, and they finally have a clear answer.  “The argument surrounding Beijing’s growth tolerance...