China's latest stimulus falls short of expectations
China's latest stimulus package in line with estimates
Investors had wanted more after Trump's election win
Chinese stocks to move on to price in Trump tariffs
By Samuel Shen and Tom Westbrook
SHANGHAI/SINGAPORE, Nov 8 (Reuters) -Investors hoping China would announce extra fiscal buffers for an economy girding for another Donald Trump presidency were disappointed on Friday.
China's top legislative body, the standing committee of the National People's Congress (NPC), did as was expected, approving bills to allow local governments to allocate 10 trillion yuan ($1.40 trillion) towards reducing off-balance sheet, or "hidden", debt.
But investors had built their anticipation around the timing of the NPC and Trump's win just a couple of days earlier, and hence expectations of something special to pre-empt another round of fractious Sino-U.S. tensions and trade barriers.
"I think markets are on the disappointed side as there were rumours that the policy could be larger if Trump won the U.S. election," said Lynn Song, ING's chief economist for Greater China.
Reuters had reported last week authorities were considering a more than 10 trillion yuan ($1.4 trillion) plan to boost growth and help local governments address debt risks.
After confirming that on Friday, Finance Minister Lan Foan signalled that more stimulus would come.
Analysts say China needs to do more to support consumers as the world's second-largest economy tackles a property market downturn and weak confidence, and meet the Communist leadership's 5% growth goal.
Donald Trump's return to the White House could bring fresh headwinds. Among other things, Trump has vowed to adopt blanket 60% tariffs on U.S. imports of Chinese goods.
"It is going to disappoint the market because China needs more essentially," said UBP's Asia senior economist Carlos Casanova.
Casanova said China needs a 23 trillion yuan package to resolve the local debt and property problems, which is about 15% of its economy, and is probably "going to hold back some of that fire power until they have a better idea of what President Trump is planning".
Beijing has been ramping up efforts to boost the fragile economy. Since late September, it has rolled out interest rate cuts and property measures and kicked off an unprecedented 800 billion yuan ($111.60 billion) rescue package for the stock market.
Stock prices rallied sharply in late September but have since lost momentum. The blue-chip CSI 300 Index .CSI300 is still up 20% since then while the Hang Seng Index .HSI is down nearly 10% from an October peak.
TURN TO TRUMP TRADE
Investors who had been waiting to hear from the Standing Committee may also now move decisively to position for a second Trump presidency.
So far, selling has been limited to exporters and even that has been relatively modest, with stock markets in Shanghai .SSEC and Hong Kong .HSI logging their best week in a month on Friday.
Trump's threats of high tariffs seem so far to have been viewed as negotiable, and China's economy is seen as more insulated to trade restrictions than it was eight years ago.
"We do think that China is in a good position to navigate tariff risk going forward, whatever may be proposed," said Robert St Clair, head of investment strategy at Fullerton Fund Management in Singapore, which is bullish on China's outlook.
"There is a tension, but there is also an interdependence between China and the U.S.," he said.
Some investors also see opportunity for China in a more inwardly focused U.S. administration.
"Trump's America First policy is not just targeting China, but also the EU, Japan, South Korea, Taiwan and other allies, which could help China make breakthroughs against Western curbs," said Wan Chengshui, head of investment at Guangdong-based asset manager Golden Glede.
($1 = 7.1685 Chinese yuan renminbi)
Additional reporting by Summer Zhen and Jiaxing Li in Hong Kong
Editing by Vidya Ranganathan and Gareth Jones
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
