by Kevin Yao, Joe Cash and Ellen Zhang
BEIJING (Reuters) – China said on Tuesday it was “fully confident” in achieving its full-year economic growth target, although it refrained from announcing stronger fiscal measures, disappointing investors who had counted on greater support from the authorities to get the economy back on track.
China’s stock markets, which reopened on Tuesday after a public holiday, hit their highest level in two years, but enthusiasm faded after the National Development and Reform Commission (NDRC), the main economic planning body of the Asian giant, did not provide details likely to maintain market optimism.
The Hong Kong Stock Exchange lost 9.4% on Tuesday, its biggest fall since 2008.
The CSI 300 index of large caps from mainland China, on the other hand, gained 5.93%, while the Shanghai SSE Composite rose 4.59%, significant gains but well below the increase of more than 10% observed at the start of the session.
NDRC Chairman Zheng Shanjie said at a news conference that the government plans to issue 200 billion yuan ($28.3 billion) in advance fiscal spending and investment projects from 2025.
The country will also accelerate fiscal spending and “all parties should continue to make more vigorous efforts” to strengthen macroeconomic policies, he added.
“The international market is volatile, global trade protectionism has intensified, and factors of uncertainty and instability have increased. These factors will have a negative impact on my country in the areas of trade, investment, finance and others,” warned Zheng Shanjie.
LACK OF DETAILS
More policy support is needed on the fiscal front to sustain market optimism, investors and economists say.
“So far, the NDRC press conference seems to be lacking in details regarding the stimulus measures. Hopes were raised but the results were disappointing,” said Christopher Wong, currency strategist at OCBC.
In an effort to curb the economic slowdown, China unveiled the most aggressive stimulus package since the COVID-19 pandemic in late September, along with significant support aimed at the struggling real estate market.
The world’s second-largest economy faces strong deflationary pressures from housing market woes and consumer confidence that remains low, highlighting its overreliance on exports in an increasingly global trade environment. more tense.
According to analysts, however, it will take time to restore consumer and business confidence and put the economy on a more solid footing.
The Chinese government has set a growth target of around 5% for this year, but economic indicators have shown that growth momentum has weakened since the second quarter, weighing on household spending and sentiment. businesses.
To address insufficient domestic demand, Zheng Shanjie told reporters that authorities would focus on improving people’s livelihoods to boost consumption and investment, but did not provide details on concrete measures.
The government has issued 1 trillion yuan of super-long-term special bonds scheduled for this year to finance major projects, and more such bonds will be issued next year, the NDRC chairman said. without giving further details.
( Diana Mandiá, edited by Blandine Hénault)
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