Stories
China Signals Urgent Economic Stimulus Amid Deepening Slowdown
- •China's State Council announced new measures and policies to support the economy and stabilize the property market, signaling an urgent shift in approach.
- •The government will implement a package of practical and effective additional policies to safeguard economic goals and address "emerging issues."
- •This shift indicates an imminent new round of stimulus as Beijing grows concerned about cooling momentum in the world's second-largest economy.
- •Local authorities can use unused bond quotas, and the central bank's relending allowance will increase for sectors like technology, agriculture, and small businesses.
- •Policymakers will also study fresh measures to stabilize the property market, promote employment, and boost household income.
Key Questions Answered
China's State Council announced plans to introduce a package of practical and effective additional policies, including allowing local authorities to tap unused bond quotas and increasing the central bank's relending allowance to encourage loans for tech, agriculture, and small businesses. Policymakers will also study measures to stabilise the property market, promote employment, and boost household income.
Investors reacted positively by bidding up property stocks after Beijing signalled its shift in language toward imminent economic stimulus. A Bloomberg index of developers climbed more than 4% by the mid-day break, marking its largest gain in over a month.
Economists note that underlying growth momentum is not strong enough on its own to reach annual targets, necessitating additional policy support in the fourth quarter to bridge the gap. Experts like Lynn Song from ING Bank point out that substantive measures to stabilize the property market will have the most impactful boost for the economy.
