China cut rates on Monday. (Scintillating, I know.)

While not exactly the stuff headlines are made of, the moves (plural) were worth a mention, coming as they did on the heels of an uneventful Third Plenum that left markets loitering in limbo.

The PBoC cut the seven-day reverse repo rate in a kind of last minute move to green light reductions to both LPR tenors just a few minutes later. Typically, LPR cuts follow reductions to the one-year MLF rate, which was left unchanged this month.

The LPRs, you’re reminded, became the de facto policy rates in early 2020, when financial institutions ceased to use the old benchmark lending rate as a reference for pricing credit while embarking on a six-month push to convert the existing loan stock to the new base, which was introduced in August of 2019 during a sweeping revamp.

The last cut to the one-year LPR was nearly a year ago. The five-year tenor, which is linked to mortgage rates, was cut by 15bps, the most ever, in February, amid Beijing’s efforts to put a floor under the flailing property market.

The LPRs are priced off one-year policy loans (i.e., the MLF rate), but it looks like the PBoC may be leaning towards using the seven-day repo rate to signal markets going forward. Monday might’ve marked the beginning of a new regime in that regard.

Today’s cuts were a token 10bps and won’t make much practical difference if they make any at all. The signaling effect is, I suppose, meaningful, although if the Party wanted to signal something to markets about the government’s determination to revive an economy which underperformed expectations in Q2 and which is still teetering on the brink of deflation, they squandered another opportunity last week: The Third Plenum was a dud.

The figure below’s amusing. Mainland shares rose every session last week on the way to their best showing since February. By contrast, Chinese shares traded in Hong Kong suffered one of their worst weeks this year.

I don’t see any reason to be polite: That’s farce. Those are supposed to be the same stocks! Not name-for-name, necessarily, but you get what I’m saying. Onshore markets aren’t real. They’re a Potemkin village, or at least during politically-sensitive weeks like last week.

How anyone’s supposed to take that seriously is beyond me. The Chinese government bought Mainland equities last week — either directly or via ETFs — to prop up the market. The prices aren’t real. Say what you will about “manipulated” Western equity benchmarks, but it’s a little more subtle than that. Joe Biden didn’t call up Janet Yellen when NATO was in town and instruct her to buy SPY and QQQ in unlimited quantities under threat of execution if the S&P closed red.

Anyway — and to state the obvious — Monday’s 10bps rate cuts in China aren’t going to convince anyone. Of anything.

On Sunday, Beijing released a 15-part, 60-point communique, the capstone document from the plenum. Spoiler alert: It was the same old bullsh-t. Just nebulous Xi quotables strung together.

It’s incredible to me that analysts and economists are still entertaining this charade. China’s lost to Xi’s delusions of grandeur. The economy’s not “opening up.” It’s not liberalizing. It’s backsliding into a top-down, command model again.

And Comrade Xi’s nobody’s “partner.” He’s a totalitarian dictator. If he gets the chance, he’ll kill us all. (I’m just joking. Or not.)