E China's Liquidity Strains

The huge cash injection in January means that the total liquidity in China’s banking system will be about 900 billion yuan higher than in the same period in 2019.

China’s economy is facing mounting isolation as other countries introduce travel curbs, airlines suspend flights and governments evacuate their citizens, all of which worsens the slowdown in the world’s second-largest economy.

As already noted, China’s influence of the world economy is far vaster today than it was in 2003 when it encountered the SARs epidemic.

Back in 2003, China represented about 3% of the global economy; currently, it is approximately 16% of global GDP.

 China’s government clearly will need to take even more aggressive measures in the coming months to avert a more serious slowdown.

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