China Reveals More Stimulus And Measures For Economic Recovery, No Word On Package Size

Finance Minister Lan Foan, said that government will help local bodies in managing their debt problems, provide subsidies to individuals with low incomes, and give support to the property market

However, lack of information regarding the stimulus package troubles investors as it will prove to be a crucial detail to understand how long China’s recent stock market rally will really last

Source : Unsplash

China on Saturday revealed that it plans to ‘significantly increase’ debt in order to help its economy recover, however, the country didn’t disclose any details on the size of the stimulus package.

Speaking in a press conference, Finance Minister Lan Foan, said that government will help local bodies in managing their debt problems, provide subsidies to individuals with low incomes, and give support to the property market. The official informed that as part of the revival measures, the government will also help replenish the capital of state banks, reported Reuters.

Notably, investors have been urging China to undertake such measures as its economy loses momentum and finds it difficult to overcome deflationary pressures and boost consumer confidence following a sharp plunge in the property market.

However, lack of information regarding the stimulus package troubles investors as it will prove to be a crucial detail to understand how long China’s recent stock market rally will really last, the report noted.

These details will not be revealed until the next meeting of the authorities. While the official date for the meeting is yet to be announced, it can be expected in the coming weeks. 

Notably, several macroeconomic figures in the recent months have missed predictions and led to an increase in concern amongst economists and investors regarding the growth target of 5 per cent set by the government for the year. 

The data for September is expected to be released in the omcing week and is anticipated to further reveal the weakness in the economy. However, officials have been confident that the target for 2024 will be met. 

The earlier stimulus package to help the economic revival was announced by the central bank in late September. While the measure have managed to lift market sentiment, the report said that analysts feel a need for the Chinese government to address the structural issues more firmly like enhancing consumption and cutting down its dependence on debt-fuelled infrastructure investment.