The Chinese economy has failed to gain any decent momentum following the reopening from stricter COVID-19 lockdowns in Dec. 2022. Macroeconomic indicators vouch for this fact.
Weak data has prompted the communist regime of the country to promise stimulus measures to kickstart growth.
CNBC Mad Money host Jim Cramer on Monday said, “China can keep trying to stimulate but can it have a guns and butter strategy and still deflate.”
“Guns-and-butter” is a phrase used to refer to a government’s dilemma in apportioning spending between defense and social programs.
Apparently, the stock picker finds it hard to believe that the government spends lavishly on both defense and social programs and still has a deflationary environment.
Data released by the China National Bureau of Statistics showed that consumer prices remained unchanged in June relative to the year-ago period and producer prices fell 5.4%, marking the ninth consecutive month.
“Military and luxury spend stimulation are a lousy combination,” Cramer said. He also questioned whether “Belt & Road” will still be a priority after the more than $200 billion spent on stimuli.
China’s Belt and Road Initiative, also known as the New Silk Road, is an ambitious infrastructure project launched in 2013 aimed at increasing China’s economic and political clout. It was originally devised to link East Asia and Europe through physical infrastructure and the project has now brought within its ambit Africa, Oceania, and Latin America.
When China hinted that it will implement measures to revitalize the slumping property market earlier this month, Cramer said, “A stimulus policy based on home buying in a no-growth economy has been a sucker’s bet every time. Only the West buys into it. But we don’t live there.”
China and the United States have had tensions during the Joe Biden administration over its possible attack on Taiwan.
Meat industry in China could be seeking for larger imports as the consumption of meet has increased since the 1970s.
“After several decades of rapid growth, China has emerged as a major producer, consumer, and importer of meat,” wrote USDA economists Fred Gale and Fengxia Dong. Meat provides 19% of daily calories, compared to 4% in the 1960s.
The Chinese Foreign Ministry has projected a growth in meat production reaching 93 tonnes by 2025.
“While a significant portion of China’s population still has nutritional deficiencies that induced low meat consumption, rising incidences of obesity, heart disease, and other diet-related diseases have prompted Chinese public health officials to recommend that consumers curb meat consumption,” according to the report. “Like other nations, there is concern about the environmental effects of livestock production.”
Produced in association with Benzinga
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