Space Industry and Business News
TRADE WARS
Analysts warn more detail needed on new China economic measures
Analysts warn more detail needed on new China economic measures
By Peter CATTERALL and Mary YANG
Beijing (AFP) Oct 12, 2024

Analysts gave a cautious welcome to China's announcement Saturday of fresh fiscal stimulus to revive its ailing economy but warned that more details -- and specific headline figures -- were needed before its effect could be fully assessed.

At a highly anticipated news conference, Beijing said it would issue special bonds to boost the capital available to banks, as well as allow local governments to borrow more.

The moves add to a series of measures unveiled in recent weeks that have included interest rate cuts and liquidity injections for banks, all aimed at kick-starting China's dragging economy.

Leaders said recently that the government's official growth target for this year of about five percent was within reach.

But economists have warned that a robust fiscal stimulus programme is necessary in order to boost domestic spending and achieve the full post-pandemic recovery that has so far eluded policymakers.

- 'Devil in details' -

"The surprise today is that there is no specific number," Heron Lim of Moody's Analytics told AFP after the Saturday press conference, saying it looked like the government was "still working on the minute details of the fiscal stimulus".

"Unfortunately for China, the devil is in the details. It would be preferable that they do have some headline numbers for people to chew on," he added.

"In the meantime, investors might be taking a step back until they are absolutely certain of the direction fiscal support is taking."

Although Saturday's news conference did not unveil a "bazooka" stimulus package, which investors have been clamouring for, comments by officials on expanding central support for the economy received some praise.

Finance Minister Lan Fo'an said the government was "accelerating the use of additional treasury bonds, and ultra-long-term special treasury bonds are also being issued for use".

The debt ceiling of local governments would also be increased, in theory empowering them to spend more on infrastructure and protect jobs.

"These policies are in the right direction," said Pinpoint Asset Management's Zhang Zhiwei in a note.

"While (Lan) didn't say explicitly that they will raise fiscal deficit, I think his comments imply that it is possible the government will raise fiscal deficit above three percent for next year," he wrote.

Such a move would represent a "meaningful shift" in Beijing's fiscal policy approach, said Zhang, helping to "boost domestic demand and mitigate the deflationary pressure in the economy".

But the impact of new policies on China's broader economic outlook will depend on their "size and composition" -- again, details that have yet to be announced -- he said.

- Long-term change ahead? -

A major focus of Saturday's news conference was the government's efforts to shield local authorities from spiralling debt that could have negative spillover into the economy.

Xing Zhaopeng, senior China strategist at ANZ, said the messaging showed officials were focused on "derisking local governments".

A new quota for treasury and local bonds, as well as a debt swap programme that could reach 10 trillion yuan ($1.42 trillion) in the coming years, is expected, he said.

Such moves would represent "long-term and structural change", Xing added, noting that "local governments are the growth drivers in China".

Other headwinds -- including sluggish consumption and high youth unemployment -- threaten to dampen economic vitality.

"Fiscal commitment needs to be more robust to offset the drag from households and the private corporate sector," Gary Ng, senior economist at Natixis, told AFP.

Beijing had not yet decided on the size of its eventual fiscal stimulus package, said Ng, "meaning the impact on growth will depend on whether such announcements are enough to boost confidence.

"More needs to be done regarding implementation and injecting actual new fiscal money."

pfc-mya/reb/mtp

ANZ - AUSTRALIA & NEW ZEALAND BANKING GROUP

NATIXIS

Related Links
Global Trade News

Subscribe Free To Our Daily Newsletters
Tweet

RELATED CONTENT
The following news reports may link to other Space Media Network websites.
TRADE WARS
China tees up fresh spending to boost ailing economy
Beijing (AFP) Oct 12, 2024
China said Saturday it would issue special bonds to help its sputtering economy, signalling a spending spree to bolster banks, shore up the property market and ease local government debt as part of one of its biggest support packages in years. The plan is part of a series of actions undertaken by Beijing to draw a line under a years-long property sector crisis and chronically low consumption that has plagued the world's second biggest economy. Beijing's planned special bonds are aimed at boostin ... read more

TRADE WARS
New molecules switch reversibly using light and heat

Fake AI history photos cloud the past

Ancient 3D paper art could help shape modern wireless tech

Ethiopia's 'korale' recyclers turn waste into money

TRADE WARS
BlackSky secures US Navy contract for Gen-3 Optical Intersatellite Links

Viasat partners with CYSEC for satellite cybersecurity solutions

GMV to lead development of communications hub for EU's GOVSATCOM program

Astranis secures cxontract to add military Ka band to Omega satellites

TRADE WARS
TRADE WARS
China launches two more satellites for Beidou navigation system

SpaceX launches European Galileo satellites to medium Earth orbit

OneWeb Technologies unveils Astra PNT Solution for GPS-Denied Environments

Mathematical Proof Confirms Five Satellites Required for Precise GPS Navigation

TRADE WARS
Climate-friendly aviation milestone: turboprop emissions tested using 100 percent synthetic fuel

Airbus UpNext and Toshiba Team Up for Superconducting Motor Development

Russian jet buzzes U.S. fighter off Alaska in 'reckless, unprofessional maneuver'

EU recommends airlines avoid Lebanese, Israeli airspace

TRADE WARS
Taiwan's TSMC posts sharp rise in third quarter net profit

ASML shares dive after disappointing Q3 bookings

MIT team takes a major step toward fully 3D-printed active electronics

Engineering technique advances lasers and LEDs with atomic-level control of perovskite materials

TRADE WARS
Using satellite data to expand understanding of river flow dynamics

Artificial intelligence and satellite data advancing climate modeling

Satellite data fusion enhances early detection of convective clouds

Hurricanes, storms, typhoons... Is September wetter than usual?

TRADE WARS
Return to sender: waste stranded at sea stirs toxic dispute

VA weighs whether so-called forever chemicals have connection to kidney cancer

California expands ban on plastic grocery bags

French lake still riddled with bombs 80 years after World War II

Subscribe Free To Our Daily Newsletters




The content herein, unless otherwise known to be public domain, are Copyright 1995-2024 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. General Data Protection Regulation (GDPR) Statement Our advertisers use various cookies and the like to deliver the best ad banner available at one time. All network advertising suppliers have GDPR policies (Legitimate Interest) that conform with EU regulations for data collection. By using our websites you consent to cookie based advertising. If you do not agree with this then you must stop using the websites from May 25, 2018. Privacy Statement. Additional information can be found here at About Us.