Morgan Stanley Fixed-Asia Economics The Viewpoint China – Deflationary Pressure...-105795396

MJanuary8,202405:25PMGMTIdeaAsiaEconomicsAsiaPacificMorganStanleyAsiaLimited+8522239-7812+656834-8272TheViewpoint:China–ChetanAhyaDeflationaryPressuresStill+8523963-0376PersistentChiefAsiaEconomist+8522848-5652Chetan.Ahya@morganstanley.comDeflationarypressuresappeartobepersistinginChina,whilethepolicyresponseremainsreactive.Againstthisbackdrop,DerrickYKamtherearerisksthatthecorporatesectorslowswagegrowth,broadeningthedeleveragingtrendtohouseholdsandincreasingAsiaEconomistdeflationarypressures.Derrick.Kam@morganstanley.comKeyTakeawaysQiushaPengAggregatedemandisweak.OurChinaeconomicsteamestimatestheGDPEconomistdeflatorat-1.3%Yin4Q23,thethirdconsecutivequarterwithovera1%declineinQiusha.Peng@morganstanley.comprices.JonathanCheungNominalGDPgrowthwilllikelybe3.5%Yin4Q23,markingthesecondconsecutivequarterofbelow4%growth.EconomistJonathan.Cheung@morganstanley.comCorporaterevenuegrowthisslowing.Thismaypromptthecorporatesectortoslowinvestmentandcutwagegrowth.MorganStanleyappreciatesyoursupportinthe2024InstitutionalInvestorAll-AsiaIfthismaterialises,itcouldriskthestartofhouseholddeleveraging,weakeningResearchTeamSurvey.Requestyourballotaggregatedemandandaddingtodeflationarypressures.here.Adecisiveshifttowardsactivefiscaleasingandrebalancingtowardsconsumptionisneededtoaddressthedeflationchallenge,inourview.Forimportantd...