“Based on Japan’s experience in the 1990s, there is the risk that China is entering a liquidity trap due to the risks of balance-sheet recession,” said Natixis’s chief economist for Asia Pacific Alicia Garcia Herrero.
Fan Gang, a prominent economist and former adviser to the central bank, told a forum in June that China faces a liquidity trap but not a Japan-style deflationary morass.
Yet about 180 domestic A-share companies say in their stock filings that they have invested in CDs this year.
China’s 220 million retail stock investors, equivalent to Brazil’s population and the biggest drivers of daily moves, have kept to the sidelines this year.
“I wouldn’t pour money into the stock market any time before I see a clear rising trend,” he said.
Persons:
Florence Lo, ”, Asia Pacific Alicia Garcia Herrero, “, Byron Gill, ‘, ” Gill, Betty Wang, Wu, ” Wu, John
Organizations:
REUTERS, Companies, Asia Pacific, Pacific Opportunities Fund, U.S, Bank, ANZ, Eastroc Beverage, China Merchants Bank, Bank of Ningbo’s
Locations:
SHANGHAI, SINGAPORE, Japan, China, Bank, Shanghai