It doesn’t matter how much money is printed. China’s ghost cities can’t make money if there’s no business, never mind people. The Wall Street Journal reports:
Mounting evidence of weakness in China’s economy and increasing stress in its financial system are testing the government’s determination to ride out a slowdown without resorting to stimulus measures.
A preliminary gauge released Thursday suggested that China’s crucial manufacturing sector contracted at a faster rate in June compared with May. The reading is the latest sign that the economy may be faltering, after exports, industrial output and fixed-asset investment all slowed last month. The results hit Asian financial markets and commodities markets on Thursday amid worries that China’s slowing growth could have a ripple effect.
China at the same time is grappling with increasingly tight cash squeeze, as rates surge in the market at which banks lend to each other. The crunch stems in part from a slowdown in foreign capital inflows due to skepticism over China’s growth prospects.