Beijing has released a steady stream of piecemeal support for the world’s second-largest economy but failed to generate strong consumer spending © Bloomberg
Published October 12, 2023
Regulators’ plan to boost domestic markets comes as inflation and trade data show recovery still fragile
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https://www.ft.com/content/b700406e-1ec6-4ff5-9bfc-8e075d40a06a
China’s financial sector authorities have proposed setting up a stock market stabilisation fund to boost flagging confidence among domestic investors, as a new release of data showed the recovery in the world’s second-largest economy remains fragile. Four people familiar with the matter have said Beijing is considering the plan, which would probably invest in domestic equities through existing financial institutions and professionally managed funds, according to one of the people. The government money would be matched by its partner funds and institutions, the person added. Two of the people said that financial sector regulators including the stock market watchdog — the China Securities Regulatory Commission — and the Ministry of Finance have submitted the proposal to the State Council, China’s cabinet, which would ultimately decide how the proposed fund would operate. Two people familiar with the proposal said the programme would need to raise at least Rmb1tn ($137bn) to be effective. “The fund needs to be big enough to influence the market. A few hundred billion yuan isn’t enough to boost confidence. We need at least Rmb1tn,” said a government adviser involved in designing the fund.
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SOURCE: https://www.ft.com/content/b700406e-1ec6-4ff5-9bfc-8e075d40a06a
RELATED: China consumer prices were unexpectedly flat, as economic recovery remains fragile
An undated editorial photo of Chinese yuan cash bills and the flag of the People’s Republic of China.
Published October 12, 2023
- Consumer price index for September was flat on an annual basis in September, the National Bureau of Statistics reported Friday.
- Producer price index fell 2.5% from a year earlier, weaker than expectations for a 2.4% decline, after a 3% drop in August.
- Tepid prices underscore what China’s top leaders labeled as a “tortuous” economic recovery after the country emerged from its draconian “zero Covid” curbs toward the end of last year.
China’s consumer prices were flat in September, while factory gate prices saw annual declines slow for a third month — pointing to the uneven post-Covid recovery in the world’s second-largest economy that may require further policy support.
Consumer price index for September was flat on an annual basis, the National Bureau of Statistics reported Friday, below than the median estimate for a 0.2% increase in a Reuters poll. CPI inched up 0.1% in August for the first year-on-year increase in three months.
Core inflation — excluding energy and food prices — however, climbed 0.8% in September from a year earlier, the bureau said in a separate statement. This rate of increase was similar to the one recorded in August.
China’s producer price index fell 2.5% from a year earlier, weaker than expectations for a 2.4% decline, after a 3% drop in August. The drop in factory prices, though, was the smallest in seven months.
Tepid prices underscore what China’s top leaders labeled as a “tortuous” economic recovery after the country emerged from its draconian zero Covid curbs toward the end of last year. China stands as a stark outlier among the world’s major economies that are mostly still battling stubbornly high inflation after the Covid-19 pandemic peaked.
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SOURCE: https://www.cnbc.com/2023/10/13/china-economy-september-cpi-unexpectedly-flat.html
RELATED:
Xi Jinping tells China’s biggest economic zone to ‘balance growth and security’ – and no more mega projects
President Xi Jinping speaks at a symposium on advancing the development of China’s Yangtze River Economic Belt, in Jiangxi province on Thursday. Photo: Xinhua
Published October 13, 2023
- Officials tasked with developing regions along the Yangtze River Economic Belt told to ‘take the long view’ while balancing ecological conservation with economic growth
- President Xi’s repeated emphasis on national security could portend the lack of a large-scale stimulus before a key economic meeting of the Communist Party
President Xi Jinping wants to see a stronger push to develop China’s largest economic zone – the Yangtze River Economic Belt – with an emphasis on not only high-quality and green growth, but also security.
The region, which covers 11 provinces and municipalities along the world’s third-longest river, needs to take a long-term perspective on ecological conservation and economic growth, Xi said on Thursday at a high-level meeting in Jiangxi, one of the participating provinces.
Instead of striving to achieve short-term results amid China’s complex economic problems, Xi instructed officials to “take the long view, make long-term strategies, and safeguard long-lasting security” at the meeting attended by high-ranking officials, including three other Politburo members, Xinhua reported.
Localities under the Yangtze belt should “balance growth and security, and play a bigger role in protecting national security in terms of food, energy, key industry chains, and water”, Xi was quoted as saying at the meeting.
