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China Still Needs Expansionary Economic Policy

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BEIJING – The Chinese economy grew by 6.5% in the fourth quarter of 2020, providing a strong indication that it has recovered from the COVID-19 shock. The market consensus is that, due to base effects, GDP growth shot up to more than 18% year on year in the first quarter of 2021, and will fall steadily in the remaining three quarters of the year before finally stabilizing.

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    Addressing this year’s meeting of the National People’s Congress last month, Prime Minister Li Keqiang announced that China’s growth target for 2021 is “above 6%.” While the economy’s growth momentum looks........

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