“A Contradiction In Terms” – Here Is The Confusing Message Beijing Just Sent To Global Investors

While it has taken on secondary importance in light of the escalating international fight over the fate of Hong Kong, and it clearly is international as of Friday morning, as the following handy summary from Bloomberg demonstrated:

Pompeo condemns China’s plan to impose legislation

Biden says U.S. “should not remain silent”

U.K. says China must respect city’s freedoms

HK’s Lam offers full cooperation on security law

China says no country has right to interfere in Hong Kong

HKMA says it will maintain HKD stability

… a key message from the National People’s Congress as pertains to China’s economy which as a reminder served as the global reflation dynamo during the 2008 financial crisis, is that China – which for the first time removed its GDP target – plans to boosting growth by expanding its fiscal deficit from 2.8% of GDP to 3.6%, despite, as Rabobank pointed out, “nobody pretending to know what GDP will be, and that too many pretend this covers all the public-sector deficit when the IMF says it is 10% if you include local governments, which you must unless you want to imagine vast defaults ahead.”

Additionally, the NPC projected issuance of CNY3.75 trillion in “special” bonds, up from 2.15 trillion in 2019, and CNY1 trillion in sovereign bond issuance, which as we noted yesterday is pittance compared to what the US or even the UK are spending relative to GDP. Indeed, the South China Morning Post yesterday ran a story suggesting a larger fiscal

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