Commentary: China’s Stimulus Has Been Great for Stocks, but the Benefits for the Real Economy Are Less Certain
Listen to the full version
The Chinese mainland’s benchmark stock index notched its largest weekly gain since December 2008 in the week through Sept. 27, rising neatly 12.8% over the five days.
The stock market rally was primarily driven by the announcement of stronger-than-expected monetary easing measures aimed at restoring market confidence and allaying concerns about China’s medium- to long-term growth prospects.
The measures, announced Sept. 24, included a planned cut in the reserve requirement ratio, lowering rates on existing home mortgages and setting up a 500 billion yuan ($71 billion) swap program to fund share purchases by securities firms. Then, on Sept. 26, China’s top leaders convened an economy-focused Politburo meeting.
Download our app to receive breaking news alerts and read the news on the go.
Get our weekly free Must-Read newsletter.
- RELATED
- DIGEST HUB
Digest Hub
Back
- The Chinese mainland's stock index saw its largest weekly gain since 2008, rising 12.8% by Sept. 27, 2023, fueled by unexpected monetary easing measures.
- Measures announced on Sept. 24 included reserve requirement cuts, lower mortgage rates, and a 500 billion yuan swap program for securities firms.
- While the measures uplift market sentiment, fiscal policies are critical for real economic growth; potential expansions in government bonds and spending were discussed.
- Sept. 21, 2024：
- Liu Shijin mentioned the idea of launching a two-year, 10 trillion yuan fiscal stimulus package during an economic forum organized by Renmin University of China.
- Sept. 24, 2024：
- Announcement of stronger-than-expected monetary easing measures, including a planned cut in the reserve requirement ratio, lowering rates on existing home mortgages, and setting up a 500 billion yuan swap program. People's Bank of China Governor Pan Gongsheng signaled openness to launching additional swap programs at a press conference.
- Sept. 26, 2024：
- China’s top leaders convened an economy-focused Politburo meeting to discuss the need for monetary and fiscal easing to revitalize the property market and shore up capital market confidence.
- By Sept. 27, 2024：
- The Chinese mainland’s benchmark stock index notched its largest weekly gain since December 2008, rising nearly 12.8% over five days.
- PODCAST
- MOST POPULAR
Sign in with Google
Sign in with Facebook
Sign in with 财新