Hopes for global growth and Chinese stocks jumped ahead of the two-day Beijing Business Conference but those looking for details were left disappointed.
The main promises were towards a more proactive approach and a higher debt to GDP ratio but no attention was paid to details – or even broad outlines – of politics.
The comments called for a “strong” increase in consumer spending and stability in the property market but it is mostly unclear how that will happen. Latest report they said they would 'reasonably' control the supply of new land for buildings, pushing ahead with the rebalancing of commercial housing stock.
Regarding growth, there was no official target but he said it was “necessary to maintain sustainable economic growth.” These targets and details of stimulus policies are likely to be revealed in March at annual parliamentary meetings.
The delay in policies reflects a lack of urgency in countering the decline in sentiment in China but also reflects uncertainty about the US. The report reference to that, saying “the negative effects of changes in the external environment have deepened.”
So far, US-listed Chinese ETFs are taking this in stride but had earlier given back most of the pre-conference rally.
MCHI ETF
Overall, I see these comments as a sign that something strong is coming next year but I don't know how patient the market will be in the short term.
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