BANGKOK (AP) — China’s top leaders have vowed to ease monetary policy and provide more support to the slowing economy, while Premier Li Qiang attacked threats of Higher tariffs on Chinese exports.saying they hamper global growth.
Stocks in Hong Kong rose on Monday after state media published a report on the ruling Communist Party’s Politburo meeting that said leaders would “implement more active fiscal policies and moderately loose monetary policies.”
The shift to “moderately flexible” monetary policies from the “prudent” ones of the last 14 years was interpreted as a significant change by market players, unleashing an avalanche of buying that sent the Hang Seng index up 2.8%.
“This marks a significant recalibration in its approach, aiming to cushion anticipated economic shocks” (from higher tariffs), Stephen Innes of SPI Asset Management said in a note.
Several months ago, the Chinese central bank and other regulators began implementing various policies aimed at encouraging businesses and households to spend more money. Overall, Monday’s statement largely reiterated the same general promises as always.
“The reading leaves little doubt that the shift towards a more supportive political stance that began in September remains alive and well,” Julian Evans-Pritchard said in a report. He noted that the last such change came in late 2008, during the global financial crisis, and could be followed by faster interest rate cuts next year.
Monday’s meeting set the tone for an annual economic meeting planning meeting later in the week he will reaffirm policies for next year.
China’s economy has grown slightly slower than the official target of 5% annual expansion this year, and the property market is still stagnant. Consumer spending remains subdued, having never fully recovered after the COVID-19 pandemic, and the Politburo meeting statement promised an easier “blend” of government spending and credit to help boost consumption.
Consumer inflation in November was lower than expected at 0.2%, the government reported Monday, down from 0.3% the previous month due mainly to lower food prices. That leaves plenty of room for interest rate cuts, analysts said.
With youth unemployment still relatively high and many households feeling the pinch from lower house prices and unstable jobs, the statement called for improving people’s “sense of gain, happiness and security.”
“We must do a good job in protecting people’s livelihoods, security and stability to ensure the stability of the overall social situation,” he said.