Two women sit on the sidewalk of the Qiansimen Jialing River Bridge decorated with Chinese flags on October 3, 2024 in Chongqing, China. National Day Golden Week is a holiday in China commemorating the founding of the People’s Republic of China in 1949.
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Zheng Shanjie, director of China’s National Development and Reform Commission, pledged a series of actions to boost the country’s economy at a highly anticipated news conference on Tuesday.
But he did not announce any major new stimulus plans, disappointing investors and denting gains in mainland Chinese markets.
A senior official from the National Development and Reform Commission said China will accelerate the issuance of special bonds to local governments to support regional economic growth.
Zheng said that a total of 1 trillion yuan of ultra-long-term special sovereign bonds have been deployed to fund local projects, and promised that China will continue to issue ultra-long-term special government bonds next year.
A senior official added that the central government will release an investment plan of 100 billion yuan for next year in advance by the end of this month.
The head of the National Development and Reform Commission spoke at a news conference along with four other key officials from the national economic planning agency. The briefing comes as markets Mainland China returns from its week-long Golden Week holiday starting on September 30.
Chinese market gains have lost steam as policymakers are reluctant to roll out more stimulus. After soaring more than 10% at the opening, the CSI 300 blue chip index fell back to 5%. The gains in the Shanghai Composite Index and Shenzhen Composite Index also fell back to around 5% and 8% respectively.
Shanghai Composite Index
bland stimulation
Zheng said China was “fully confident” in achieving its full-year economic growth target for this year, while pledging to take some measures to support the real estate market and stimulate domestic consumption.
Su Yue, chief economist at the Economist Intelligence Unit, said in the report that “the lack of specific data may not be a negative signal.” China’s “policy stance on promoting growth has not changed.”
The economist kept China’s growth forecast unchanged at 4.7% and 4.8% for this year and 2025, while predicting that Beijing may arrange additional fiscal support of 10,000 to 3 trillion yuan to boost the real economy.
Shaun Rein, partner and managing director at China Market Research Group, told CNBC: “A lot of Western investors will be taking profits today and waiting to see if there will be more money coming in.” They are “because they want the government to There’s too much bubble created by massive stimulus measures.”
“Without real fiscal stimulus and details, the rally will fade,” he added.
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Last month, China’s top leader expressed a sense of urgency to deal with a long and painful economic downturn, which has cast doubt on the country’s ability to achieve its annual growth target of “around 5%.”
Before the holiday, the Chinese authorities had called on Strengthen fiscal and monetary policies Senior Communist Party officials expressed support at a monthly meeting and unveiled a series of stimulus measures aimed at ending the slide in property prices.
The stimulus blitz comes as the world’s second-largest economy faces a disappointing slowdown in growth as it recovers from Covid-19 lockdowns, weighed down by sluggish domestic demand and a protracted housing slump.
In the first half of this year, China’s economy grew by 5.0% Compared with the same period last year, the central government’s target was achieved, and in the April-June quarter, GDP growth is lower than expected Growth was 4.7%, the slowest growth rate since the first quarter of 2023.
Chinese The latest consumer price index rose 0.6% The annual increase of 0.7% in August was lower than expected, while the core CPI, which excludes food and energy prices, rose 0.3%, slowing down for the second consecutive month.
Amid a series of disappointing economic data, China Factory activity also contracted September rose for the fifth consecutive month, with the official PMI in September being 49.8. A PMI reading above 50 indicates an expansion in economic activity, while a reading below that level indicates a contraction.
During the same period, the Caixin PMI was 49.3, the largest contraction in 14 months, driven by declining demand and a weak labor market.
March, Zheng Said at a high-level press conference It said China would “continue to strengthen macroeconomic policies.” He said that as China continues to strengthen macroeconomic policy adjustments, it will involve the coordination of fiscal, monetary, employment, industrial and regional policies.
The head of the National Development and Reform Commission also admitted that “many difficulties and problems still exist” in achieving the country’s expected growth goals, according to a CNBC translation of his speech.
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