China Fades from Economic Spotlight, But Risks Remain
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Attention has shifted away from China's economic outlook to focus more on inflation and interest rates in major economies like the US and Europe.
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Investors were wrong-footed by China's severe economic downturn in 2022, so there is uncertainty and lack of conviction about its growth prospects.
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With low expectations for China, policymakers there have some breathing room to try to restore economic confidence.
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Risks of negative surprises in 2024 seem greater in advanced economies related to dramatic expected interest rate cuts and divergence between stock and bond market outlooks.
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Although no longer the center of attention, China still has potential to cause economic shocks across Asia, so investors should keep an eye on developments there.