Confidence that China’s economy can rebound from Covid restrictions is untethered to economic realities, Rockefeller International chair Ruchir Sharma wrote in the Financial Times.
“Something is rotten in the Chinese economy, but don’t expect Wall Street analysts to tell you about it,” he said, listing several indicators that point to underlying weakness.
For example, Wall Street’s assumption of 5% GDP growth would suggest corporate revenue growth of 8%, but it rose by 1.5% in the first quarter.
In fact, corporate revenue is slower than GDP in 20 of the country’s 28 sectors, and the MSCI China stock index down 15% from a January peak, he added.
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