Authorities hope the changes will help stabilize the economy, which has grown 4.8% this year but is suffering from shrinking corporate profits and a weak investment climate.
China adjusted its monetary policy for the first time in 14 years, prompting a sharp rise in stock prices and government bonds. It was reported by the Financial Times.
The Communist Party’s Politburo, led by Xi Jinping, said it plans to implement active fiscal policy and moderately loose monetary policy by 2025 to stimulate the economy.
The government’s priorities include expanding domestic demand, improving investment efficiency and supporting consumption. The Politburo also pledged to stabilize the real estate and stock markets, which are under pressure due to prolonged economic uncertainty.
Despite positive signs, China’s economy is facing difficulties: deflationary processes continue, and producer prices fell for the 26th month in a row in November. Growth in consumer prices slowed to 0.2% on an annual basis, which was a five-month low, and on a monthly basis prices fell by 0.6%.
Financial markets reacted to the news with growth: Hong Kong’s Hang Seng Index rose 2.8% to a one-month high. However, the yield on 10-year government bonds fell to 1.938%.
Authorities hope the changes will help stabilize the economy, which has grown 4.8% this year but is suffering from shrinking corporate profits and a weak investment climate.
Let’s recall that the US sanctions package has greatly complicated the ability of Russian companies to make direct payments to China.
Source: korrespondent
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