Hi, this is Anniek, writing to you from Singapore, with Evelyn, who reported from the Bund Summit in Shanghai last week. Welcome to the latest edition of The China Connection — a snapshot of what we are seeing and hearing from China watchers inside and outside the country.
Everyone wants China to spend more. So why is its government spending less, and what happens if the most indebted cities can't afford it anymore?
Governments from Washington to Brussels are being told to spend less, but Beijing is being urged to spend more.
At the International Monetary Fund and World Bank meetings in Bangkok earlier this month, Managing Director Kristalina Georgieva called the U.S. and European countries the "worst offenders" on debt and boiled down her prescription: "China needs to spend more, the U.S. has to save more, and Europe has to invest more."
Georgieva also urged Beijing to deliver more meaningful fiscal stimulus as its economy teeters on deflation, expecting China's economic growth to slow to 4.5% this year from 5% last year, and slow further to 4% in 2027.