Since the massive flood in 1998, China has again suffered from large-scale floods, causing considerable loss of lives and properties and the market is worried that the floods will make China's economy worse.

Judging from the current flood situation, the research team at ANBOUND Consulting believes this year’s flood is not as bad as 1998’s.

From an economic point of view, the market generally believes the floods have limited impact on Consumer Price Index (CPI), while the flood destroyed part of the accumulated wealth, post-flood construction may bring new investment demand.

To stabilize the economy in the aftermath of the floods, in the next few months, the government will increase fiscal spending, raise the budget deficit ratio, which will in turn promote the rebounding of credit expansion.