China’s fiscal policies will likely remain loose – Goldman Sachs

“China’s various industry crackdowns from technology to education mean monetary and fiscal policies will likely remain loose on the margin to offset the drag on economic growth,” Bloomberg reports, citing Goldman Sachs economists.

Key quotes

“Monetary and fiscal policy will need to ease to counterbalance the drags,” although the easing will likely be measured.

“Economic data will probably be weak in August, before a rebound in September and a strong fourth quarter on a sequential basis.” 

“Without policymakers communicating their thinking behind the new regulations, markets are prone to interpret such regulatory actions as an attack on profitable private companies and signs that economic growth and market liberalization are no longer important to the government.”