There’s ‘no way’ China will hit its 5.5% growth target: Stephen Roach

There’s ‘no way’ China will hit its 5.5% growth target: Stephen Roach

China faces ‘enormous risk’ and at the moment is unlikely to meet its economic growth target for the year, according to economist Stephen Roach, who has long been a bull on the giant. Asian.

“I’m a congenital bull on China,” Roach told CNBC’s “Squawk Box Asia” on Friday. “That’s not the case for me now.”

Beijing has officially set a growth target of around 5.5% for the Chinese economy this year, but Roach said “he will be lucky if he makes 4”.

“I think China is facing tremendous pressures,” said Roach, former president of Morgan Stanley Asia, currently a senior fellow at Yale University. “There’s no way he’s making his 5.5% forecast.”

China… is not going to bail out the world like it did after the global financial crisis.

Stephane Roach

senior researcher, Yale University

China has been battling its worst Covid outbreak on the mainland for weeks since the pandemic’s initial shock in early 2020. Recently released data for April showed a significant slowdown in manufacturing and services sector activity.

Beyond the economic impact of continued lockdowns as Chinese authorities continue to stick to a strict zero Covid strategy and a ‘constant emphasis’ on deleveraging – or debt reduction – the economist also described President Xi Jinping’s decision to “tie himself to Vladimir Putin’s villain” as a “really big mistake.”

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Employees working on the carbon fiber badminton racket production line at a factory in Sihong County, China’s Jiangsu Province. China reported on Saturday that factory activity in April contracted at a faster rate as Covid-19 lockdowns halted industrial production and disrupted supply chains.

Visual Group China | Getty Images

“From 2009 to 2012…China grew, you know, 8% and that cushion kept the world from falling back into a recession,” he said. “That cushion is gone.”

“China…is not going to bail out the world like it did after the global financial crisis,” Roach said. “It’s also problematic for the global economic outlook.”

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