The Rising Influence of Rising Affluence

[DewDiligence]

From your informative article:

[Jing Ulrich, chairwoman of global markets with JP Morgan] forecast that the People's Bank of China will cut the interest rate by 25 basis points and the RRR [banks’ required reserve ratio] by 50 basis points in the third quarter of this year to improve liquidity.

…"It is very likely that Beijing will cut interest rates again in August," said [Huang Haizhou, CICC's chief strategist], adding that the move will be accompanied by another reduction in the reserve requirement ratio.

In other words, at least two experts on China’s economy forecast additional easing during 3Q12. The question is to what degree this is already priced into the global markets.

This statement from the same article is encouraging:

Louise Liu, deputy director of China Forecasting Service of the Economist Intelligence Unit…said on Monday that the mainland economy will record robust growth of 9 percent in the fourth quarter, benefiting from rebounding exports, domestic consumption and infrastructure spending in the second half of this year.

All told, the economic data from China does not appear as dire as some investors think, even after taking into account that the government’s own statistics are probably fudged to some degree.