Citi: China's Supply-Demand Dynamics Have Improved, But the Economy Is Still Not Out of the Woods

Citi analysts stated that China's supply-demand dynamics are improving, but the economy has not yet fully recovered. According to the analysts, supportive real estate policies, consumer swap programs, efforts to tackle local government debt, and export prepayments have helped bolster demand as indicated by recent PMI data heading into year-end. However, the ongoing price weakness in the country indicates that there is still a long way to go to overcome deflation. Citi also argued that incentive measures will play a key role in sustaining momentum in economic activity.