Chinese Finance Minister Lan Fo’an (centre) speaks at a press conference as National Development and Reform Commission (NDRC) Chairman Zheng Shanjie (left) and People’s Bank of China (PBOC) Governor Pan Gongsheng listen, Wednesday, March 6, 2024 in Beijing, China during the National People’s Congress.
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BEIJING – China’s Finance Minister Lan Foden will hold a highly anticipated press conference on Saturday on measures to support the economy.
Economists say China needs additional fiscal support, but Beijing has yet to announce any, even in its latest wave of high-level policy announcements.
At a meeting hosted by Chinese President Xi Jinping in late September, authorities called for stronger monetary and fiscal policy support. But they did not elaborate on the details.
Analyst forecasts for how much fiscal stimulus will be needed range from about 2 trillion yuan ($283.1 billion) to more than 10 trillion yuan.
Nomura Chief China Economist Lu Ting warned in a report on Thursday that any such stimulus would typically require approval from China’s National People’s Congress, which is expected to meet later this month. He added that how the money is spent is just as important as the amount delivered – whether it is used to shore up struggling local government finances or focused on boosting consumption.
China’s retail sales have grown only modestly in the past few months, and the country’s housing market slump shows few signs of reversing.
GDP grew by 5% in the first half, sparking concerns that China may not be able to achieve its full-year target of around 5%. All eyes are now focused on October 18, when the National Bureau of Statistics is scheduled to release third-quarter GDP.
Mainland Chinese stocks have turned volatile throughout the week as stimulus-fueled gains ran out of steam after markets reopened on Tuesday after a week-long holiday. The decline brought the major indexes back to levels last seen in late September.
Stocks were rising at the time, with the CSI 300 having its best week since 2008, and major policy announcements suggesting the Chinese government would eventually step in to stimulate a slowing economy.
Just days after the Federal Reserve began its easing cycle, the People’s Bank of China cut some interest rates and extended existing housing support measures for two years. The central bank also launched Approximately $71 billion plan Allows institutional investors to borrow funds to invest in stocks.
The National Development and Reform Commission, the top economic planning body, pledged at a rare news conference on Tuesday to expedite the use of 200 billion yuan originally scheduled to be allocated next year, mainly for investment projects. The National Development and Reform Commission announced no additional stimulus measures.
Saturday is a working day in China, but markets are closed.
This is a breaking news story. Please check back for updates.
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