The National Development and Reform Commission (NDRC) of China is scheduled to hold a press briefing on Tuesday to discuss a set of policies designed to stimulate economic growth.
This announcement comes as investors are increasingly hopeful for enhanced fiscal support from Beijing, particularly under President Xi Jinping’s administration.
Set to commence at 10 a.m., the briefing will feature five senior officials from the NDRC, including Chairman Zheng Shanjie, as detailed in a government notice released on Sunday. Economists and traders are closely monitoring the situation, especially after China’s leadership expressed a clear intention to address the ongoing economic slowdown.
Just before a recent weeklong holiday, the government introduced a series of stimulus measures, which included interest rate reductions, increased liquidity to encourage bank lending, and a substantial commitment of up to $340 billion to bolster the stock market.
Since late September, Chinese stocks have seen a significant rebound, with the Hang Seng China Enterprises Index rising over 30% in the past month, driven by renewed investor confidence. However, concerns persist regarding the sustainability of this rally, as past recoveries, including a notable rally in February, have often fizzled out.
Although the NDRC’s announcement did not provide specific details about the upcoming briefing, analysts are growing optimistic that the government may announce plans to increase public spending as part of its stimulus efforts. A well-known Chinese economist recently indicated that the nation has the capacity to boost fiscal support by issuing as much as 10 trillion yuan (approximately $1.4 trillion) in special debt.
According to analysts at Morgan Stanley, the NDRC may reveal the initial portion of an anticipated fiscal package amounting to 2 trillion yuan (around $285 billion) during the briefing. This could encompass funding for local government projects, infrastructure initiatives, and a modest increase in consumer spending. Citigroup Inc. has projected the total fiscal package to be around 3 trillion yuan, though it remains unclear if all aspects will be disclosed during the NDRC session.
Johanna Chua, head of Emerging Markets Economics at Citigroup, highlighted the challenges facing China’s economy, stating that even incremental support could positively influence market sentiment.
“You just need a little bit more of a pivot in terms of expectation about what the government can do to help support you, and that might at least help change sentiment,” she remarked in a recent Bloomberg TV interview.
Bloomberg and South China Morning Post contributed to this report.
