Shaun Rein
Shaun Rein

Against many predictions, China´s economy is doing relatively well and business analyst Shaun Rein does not see the need for a stimulus to fire up growth now, he tells CNBC.

Shaun Rein:

The key is that a lot of analysts have said that the Chinese economy was in a downturn and there were fears like Lehman (like crisis). That is not going to happen anytime soon. The Q1 of GDP growth at 7.4 percent leading almost all of the expectations from Wall Street and the key areas, that is, wage growth and employment number continue to remain very strong. The government is going to get nervous if people are getting unemployed and that is not happening and consumer confidence is up which also beats expectation. So, overall positive numbers but the economy is still in a fairly fragile phase…
I have always argued that China shouldn’t and wouldn’t put together a big stimulus in next one to two month period. The economy is bad but it is not that bad and as the number show today. The government has another quarter or so to try to put (in place) major economic reforms to sort of reign in monetary policy, reign in non performing loans before you are going to see any type of stimulus because the economy is still growing. We see the industrial production drop but that is a good thing because the government is trying to push the country away from heavy investment-oriented growth more towards consumer oriented growth which we saw today getting retail fell, which is good. I do not expect stimulus anytime soon in a major way.

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More at CNBC.

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