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Moment Of Truth Looms For Historic China Rally
If you're curious as to how committed officials in Beijing really are to the stimulus push behind a world-beating rally in Chinese equities, Zheng Shanjie will offer some policy specifics this week.
Zheng's the head of China's economic-planning bureau, the National Development and Reform Commission. The department will hold a press conference on Tuesday, when mainland markets re-open after Golden Week.
To restate the obvious: Investors -- hell, forget about investors, everyday Chinese -- need
Communist? Neither Marx nor Mao would recognize it. And the Chinese working class?
Unimpressive.
Basically a steely-eyed vow to do things they previously said they would do, mostly infrastructure projects and subsidies for a few large ticket categories (dear people, please buy more industrial equipment, EVs, and white goods). Encouraging LGs to issue special bonds (as if they aren’t indebted enough already). Allowing LGs to use those funds to purchase excess housing remains a “maybe” (and I think most LGs have little interest in doing so).
Where is the USD 1 BN in central govt bond issue to defibrillate consumer spending?
Without more immigration or a higher birthrate — unlikely — the Chinese miracle is over.