China Growth Concerns Linger Despite Injection

China’s growth trajectory is still pointing down, even after an $81 billion liquidity injection.

The People’s Bank of China move to provide 500 billion yuan of three-month funds to the nation’s five largest banks will help overcome any pre-holiday cash crunch, though is unlikely to move the needle on gross domestic product, according to economists at banks including Barclays Plc.

With Premier Li Keqiang vowing he won’t be distracted by short-term fluctuations as he maintains focus on structural adjustments, the fate of his 7.5 percent expansion target hinges on whether the injection marks the start of more easing or is just a temporary liquidity measure. UBS AG said it will take a deeper slowdown to spur an interest-rate cut as it reiterated a call growth will slide below 7 percent next quarter.

Bloomberg

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