Capital Economics: Without Fiscal Easing, China's Surge in Consumer Spending Will Be Short-Lived

Capital Economics economist Zichun Huang argued that the Chinese economy improved further at the beginning of the fourth quarter due to stronger-than-expected consumer spending. Huang predicted that faster fiscal spending would support the ongoing "cyclical recovery" in the coming months. However, the economist emphasized that without significant fiscal easing next year, this increase would be short-lived, and that seems unlikely. Huang stated, "We believe the economy will start to slow again from the second half of next year, and at that point, Chinese manufacturers will also face the additional headwinds of a second trade war with Trump."