- March 1, 2018: Vol. 10, Number 3

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China’s stabilising economy

by Jennifer Molloy

With all the talk in recent years of whether China’s economy will face a hard or soft landing — as the country’s GDP growth declines, it transforms to a consumer-based economy, roots out corruption, adjusts financial controls on inbound and outbound capital, and so on — KKR’s 2018 Global Macro Outlook has a far more pointed take: “Nominal GDP in China fell 68 percent from 2011 to 2015; as such, China’s economy has already crashed, in our view.”

For 2018, the firm believes China’s real GDP growth will decline 30 basis points to 6.5 percent because of a cooling housing market, lower infrastructure-spending growth, increased anti-pollution measures, and additional supply-side reforms. Helping to somewhat offset these headwinds for China’s economy, notes KKR, will be the country’s tight job market, wage growth and strong consumer confidence. In addition, the firm believes higher growth in the United States could encourage greater export demand from

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