What Happened in China This Week?

1. Tuesday: China’s stimulus measures announced by the National Development and Reform Commission (NDRC) lacked detail and were seen as underwhelming by many investors.

2. Saturday: There is renewed optimism after the Ministry of Finance held a press conference announcing the following new policies:
• Allocate 400 billion yuan (US$56.57 billion) from the local government debt balance limit to expand local financial resources.
• Tap into an unused bond quota of 2.3 trillion yuan (US$325.3 billion) for local governments.
• Introduce a one-time, large-scale debt ceiling increase for local governments to restructure hidden debts.
• Allow local governments to use special bonds to purchase idle land from struggling developers.
• Use special bonds to purchase existing commercial homes, focusing on government-subsidized housing rather than new construction.
• Optimize tax policies and explore the abolition of value-added tax on ordinary residential buildings.
• Double the quota for college student subsidies and increase the per-person amount.

3. This time, we received more concrete details, and more policies are expected to be announced, especially after approval by the National People’s Congress. Given this continued government support, markets should perform better in the coming week.

4. During the Golden Week holiday, there were a 5.9% increase from last year and a 10.2% rise from 2019. Domestic travel spending also grew 6.3% year-on-year, or a 7.9% increase from 2019.