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China’s policy stimulus and the spillovers to EMs

China’s policy stimulus measures have generated large market moves but it is the fiscal element, which hasn’t been detailed yet, that has the potential to lift the economy. We’re not expecting a huge fiscal package and it may be less commodity-intensive than normal. If so, spillovers to the rest of the EM world will be limited, although a more positive backdrop may support EM financial markets and capital inflows.

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