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Forget ‘America first’, it’s time for a ‘China first’ stimulus

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It has all been a chimera. Markets are waking up to a bad dream and this is where the nightmare begins. Chaos is taking hold and markets are starting to panic. This is what happens when investors believe in the false prophets of “America first” and the trade truce. US President Donald Trump and much of the artifice of his economic policies and claims are coming undone, global markets are paying the price and China is in harm’s way. It is time to put up the defences and pray for salvation. The world is a mess.

The slowdown is without a doubt coming as global confidence begins to buckle and the US yield curve turns belly up, a much-vaunted market portent of future disaster. In an age where multinationalism is under the cosh and myopic national self-interest is taking over, there is not a lot global policymakers can do to stop the rot. It is every man for himself, China included.

Forget America first, this is where “China first” takes over and Beijing has to crank up domestic recovery. China needs an all-out blitz on monetary, fiscal and economic rejuvenation and Beijing should be channelling all its muscle into stopping a steeper slowdown. Looking at the recent raft of purchasing managers’ index (PMI) data, China’s factory sector is crying out for greater stimulus and in larger size.........

© South China Morning Post