admin
Investors and analysts are expecting China to deploy as much as 2 trillion yuan (US$283 billion) in fresh fiscal stimulus as Beijing seeks to shore up the world’s No. 2 economy and boost confidence.
That’s what they hope the country’s finance minister will announce at a highly anticipated briefing on Saturday, according to a majority of 23 market participants surveyed by Bloomberg. Most of the respondents expect the funding to come in the form of government bonds.
Beyond the amount of any fiscal package, the target of support will indicate where the government looks to steer its economy after years of debt-fueled expansion through investment, particularly in real estate and infrastructure.
“The stimulus should be multi-year and targeted to households and not restarting the real estate investment-led growth story,” said Pushan Dutt, professor of economics at INSEAD. “It is the focus of the stimulus rather than the size that is important.”
The weekend press conference, which the government said would introduce measures to strengthen fiscal policy, comes as investors assess how far the authorities plan to go with stimulus efforts that prompted a world-beating stock rally. Officials are also planning a briefing Monday on boosting support for enterprises.
China has already cut interest rates and ramped up support for property and stock markets in a barrage of steps announced late September. But investors have clamored for fiscal interventions economists believe are crucial to lifting confidence.
Onshore Chinese shares remained volatile throughout the week after ending a 10-day rally on Wednesday, as officials disappointed by announcing no major new stimulus following a weeklong holiday. The benchmark CSI 300 Index dropped more than 1 percent in early trading on Friday.
“Government agencies are now expected to feel the pulse of the market before publishing policies,” said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc. “They should avoid letting expectations climb and crash to deal a blow to market sentiment.”– Bloomberg
Online Reporter