China: Downside risks from tightening – Goldman Sachs

Mark Ozerov, Research Analyst at Goldman Sachs, explains that the weak April PMIs show early signs that Chinese growth is decelerating.

Key Quotes

“As the PBOC tightens policy, the key question is whether these measures can successfully isolate financial excesses and market speculation without weighing on the real economy as the “credit impulse” fades. While we think a supportive external environment will cushion China’s tightening in the short term, our biggest concern is that financial conditions will be less supportive for Asian growth as the year goes on.”