Depression, not stagflation, could hunt China in 2020

China’s GDP in the first quarter of the year has surprised nobody, but the devil is in the details. Local retail sales continued to fall in March (-16%), marginally better than during the peak of the Covid-19 outbreak in January and February. The continuation of the slump in domestic demand clearly stands out when compared with the return to production in March.  In fact, industrial production hardly declined in March (1.1%) after a collapse in January-February. More importantly, the vanishing demand cannot be explained by external factors only. In fact, export growth in March was negative (-12.5%) but less than […]