This article discusses recent developments in China’s economic policies under Xi Jinping, focusing on his shift in approach to address economic challenges. Traditionally, Xi has avoided bold stimulus measures and consumer handouts, fearing they would encourage laziness. However, faced with a faltering economy, Xi has allowed China’s most significant stimulus efforts since 2008.
Key developments include:
* The People’s Bank of China (PBoC) cut interest rates, reduced banks’ reserve requirements, and offered mortgage relief to 50 million households.
* Two new tools were introduced to support the stock market, including helping companies repurchase shares and enabling institutional investors to borrow safer assets in exchange for riskier ones. The combined value of these tools is 800 billion yuan, with room for expansion.
* China’s Politburo discussed new economic strategies and resolved to arrest the decline in the property market. The government also plans to issue 2 trillion yuan in bonds, 50% of which will prevent local governments from going bankrupt, while the other half will encourage spending through initiatives like subsidies for families and green investments.
While these measures fall short of the large-scale stimulus seen during the 2008 financial crisis, they have still exceeded market expectations, sparking significant stock market gains in China and Hong Kong. Some investors, including American hedge fund manager David Tepper, are optimistic about China’s market potential, viewing these signals as a powerful shift in policy.
[At last, China pulls the trigger on a bold stimulus package (archive.is)](https://archive.is/Tx0CQ)
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This article discusses recent developments in China’s economic policies under Xi Jinping, focusing on his shift in approach to address economic challenges. Traditionally, Xi has avoided bold stimulus measures and consumer handouts, fearing they would encourage laziness. However, faced with a faltering economy, Xi has allowed China’s most significant stimulus efforts since 2008.
Key developments include:
* The People’s Bank of China (PBoC) cut interest rates, reduced banks’ reserve requirements, and offered mortgage relief to 50 million households.
* Two new tools were introduced to support the stock market, including helping companies repurchase shares and enabling institutional investors to borrow safer assets in exchange for riskier ones. The combined value of these tools is 800 billion yuan, with room for expansion.
* China’s Politburo discussed new economic strategies and resolved to arrest the decline in the property market. The government also plans to issue 2 trillion yuan in bonds, 50% of which will prevent local governments from going bankrupt, while the other half will encourage spending through initiatives like subsidies for families and green investments.
While these measures fall short of the large-scale stimulus seen during the 2008 financial crisis, they have still exceeded market expectations, sparking significant stock market gains in China and Hong Kong. Some investors, including American hedge fund manager David Tepper, are optimistic about China’s market potential, viewing these signals as a powerful shift in policy.
[At last, China pulls the trigger on a bold stimulus package (archive.is)](https://archive.is/Tx0CQ)