Economic policies and financial markets in China: what effects?
Financial markets/economy
Posted by MoneyController on 16.10.2024
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What prospects for the Chinese financial market? In this respect, much will depend on the effectiveness of the economic policies implemented and to be implemented by the Beijing government.
On 18 October, China's National Bureau of Statistics will publish Q3 GDP figures: in Q1 China's GDP grew by 5.3% and in Q2 by 4.7%. But moving the markets in China today appear to be the measures announced and implemented by the Beijing government to solve some structural problems of the Chinese economy, such as the real estate market and domestic consumption. These measures, after initial positive reactions, were greeted negatively by the markets on Friday 11 October.
As Rita Fatiguso explains in ‘Il Sole 24 Ore’, market participants seem to feel that the measures implemented by the government and the People's Bank of China are not sufficient. Moreover, China now has to deal with the ever-expanding issue of duties: the trade conflict no longer involves only the United States, but also the European Union.
On ‘CNBC’, Evelyn Cheng writes that, in the words of China's finance minister Lan Fo, the government in Beijing plans further stimuli for the economy. Also from Cheng are comments from some experts. The president and chief economist of Pinpoint Asset Management, Zhiwei Zhang, believes that these measures go in the right direction, although they will have to be evaluated in more detail to understand their real impact on the macroeconomic picture.
Nomura's chief economist, Ting Lu, also believes that one must consider not only the quantity, but also where these and the next funds to be allocated by the Chinese government will go. On the one hand, he explains, these funds could only serve to put the finances of local governments back on track, or they could help to boost the domestic market (a market which, given the population, 1.3 billion people, is really huge).
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