China's Economic Stagnation: Is the Worst Over?

China's economic recovery from the pandemic is set to broaden, and the country is not heading towards Japan-style stagnation just yet, according to Macquarie's Chief China Economist Larry Hu. The recent economic slowdown was attributed to a "premature" withdrawal of policy support after better-than-expected first quarter data. Going forward, policymakers are expected to remain accommodative given the lack of inflation and high youth unemployment. While the recovery is far from being self-sustaining, the worst is behind us, and the economy will enter another upward spiral with stronger demand and better confidence.