China Tried To Talk Stocks Higher. It Didn’t Work

China Tried To Talk Stocks Higher. It Didn’t Work

The PBoC ran up against the law of diminishing returns Tuesday, when an attempt to talk domestic equities higher fell flat. With stocks reeling and outflows accelerating, China's monetary authority promised to do its part to support the faltering economy. In a statement, the bank reiterated plans to wind down Xi's regulatory blitz on platform companies, while leaning on boilerplate rhetoric to emphasize the role of "prudent monetary policy" in bolstering hard-hit industries and small businesses
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2 thoughts on “China Tried To Talk Stocks Higher. It Didn’t Work

  1. If Beijing enters Covid lockdown, and disruption from Shanghai lockdown spreads to other cities not (yet) locked down, “the worst may [not] be over”.

    Xi’s more sensible advisers must surely be telling him that, until China vaccinates its population with an effective vaccine (read: a Western vaccine, or the still-unseen successful Chinese mRNA vaccine), the cycle of lockdowns will not end. Covid is not mutating to be less virulent (severe). Rather, populations outside of China are acquiring increasing protection from severe Covid via vaccination and/or prior infection. In persons who are both unvaccinated and not previously infected, Omicron is not substantially less virulent than OG or Delta. The Chinese population, largely unprotected either via an effective vaccine or prior infection, remains highly vulnerable and will continue being so, unless Xi changes his course.

    For goodness sake, do a mini-trial on the Biontech Omicron-specific vaccine in China, claim that “Chinese scientists helped develop this new vaccine specifically for Chinese physiology” or whatever, rename it something Chinese sounding, and show off Chinese societal efficiency with a mass vaccination-boost campaign. Sure, it will cost $40BN, but that’s nothing compared to the benefit.

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