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Chinese Stocks Crash On Botched Stimmy Reveal
If at first you don't succeed.
Beijing on Wednesday said Finance Minister Lan Fo'an will host a press event on Saturday, when the government will take a mulligan and try again to pacify anxious markets following Zheng Shanjie's underwhelming performance earlier this week.
Zheng, you'll recall, was expected to announce a raft of fiscal stimulus measures at a Tuesday briefing. Instead, he regaled the media with familiar talking points and allusions to previously-announced measures. Chinese equit
Saturday is a holiday make up day.
I am unclear on who does what exactly, but my impression was MoF provides the money and NDRC spends it, or something like that. So Zheng would need to come out for another at-bat?
Also there is “how much stimulus” and “what stimulus”. If China issues USD 2BN central govt debt and spends it on infrastructure investment (whether roads or fabs), maybe it can eke out the targeted 5% this year – or not, it is October 9, how are they going to get USD 2BN multiplying in the economy in <3 mo when equipment lead times are far longer? How does that help address the economy’s structural problems (consumer, employment, excess housing, population, SOE dominance)?
I have yet to see that Xi wants to encourage the behavior required to address some of those problems or is willing to run the kind of deficits required to address the others. I can imagine that his men will use this stimulus, weak sauce though it may be, as cover for statistical improvements during a seemingly barn-burning 4Q.
As an aside, it is funny reading financial media about how market pressures will force Xi’s hand. Bond market, maybe, but I suspect he regards equity brokers and traders similarly to tech billionaires.