Created
: 2024.11.06
2024.11.06 17:17
With 2024 growth risk ebbing, we think the policy focus has shifted to 2025. The Standing Committee of the NPC may approve bank recapitalisation and local debt swap plans, but we see low probability of a budget revision for 2024. Additional fiscal stimulus to counter external risks will likely be planned at the December CEWC, Standard Chartered's economists Shuang Ding and Hunter Chan notes.
"China's policy makers will likely reserve their firepower for next year as growth risks have decreased. The mid-October fiscal package made CNY 1.4tn additional spending possible in Q4, reducing downside risks. The official PMI returned to expansionary territory in October, consistent with the Caixin PMI and our SMEI survey, boding well for an activity rebound in Q4. We now see upside risk to our 2024 growth forecast of 4.8%. Senior government officials have recently become more confident in achieving the growth target of 5%."
"The Standing Committee (SC) of the National People's Congress (NPC) will conclude its session on 8 November, immediately after the US presidential election. Many market participants expect the SC to approve additional fiscal stimulus (including revising the 2024 budget), with the size of stimulus dependent on the US election outcome. We expect the SC to approve a CNY 1tn special central government bonds (CGBs) quota to replenish capital at six major banks, and a local special bonds quota of CNY 6-10tn for the debt swap to be used over 3-5 years. We see a below-50% chance of the 2024 CGB quota being increased. The government may wait until the Central Economic Work Conference (CEWC) in December to tackle external risks in a comprehensive way."
"If Harris wins the election, we expect China's narrowly defined official budget deficit to be widened to 3.5% of GDP (CNY 4.8tn) in 2025 from an effective 3.4% (CNY 4.5tn) this year. In case of a Trump win, another CNY 1-2tn of spending (c.1% of GDP) will likely be added to offset a potential increase in US tariffs on imports from China."
Created
: 2024.11.06
Last updated
: 2024.11.06
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy