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Chinese leaders pledge ‘moderately loose’ monetary policy
Legal Watch |
2024/12/09 06:30
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China’s top leaders have pledged to loosen monetary policy and provide more support for the slowing economy, while Premier Li Qiang swiped at threats of higher tariffs on Chinese exports, saying they hinder global growth.
Shares in Hong Kong jumped Monday after state media released a report on the meeting by the ruling Communist Party’s Politburo that said leaders would “implement more active fiscal policies and moderately loose monetary policies.”
The shift to “moderately loose” from the “prudent” monetary policies of the past 14 years was taken as a significant shift by market players, unleashing a spate of buying that pushed the Hang Seng index up 2.8%.
“This marks a significant recalibration in their approach, aiming to cushion the anticipated economic shocks” (from higher tariffs), Stephen Innes of SPI Asset Management said in a commentary.
Several months ago, the Chinese central bank and other regulators began rolling out various policies aimed at encouraging businesses and households to spend more money. Overall, Monday’s statement mostly reiterated the same broad promises as usual.
“The readout leaves little doubt that the shift toward a more supportive policy stance that began in September is still alive and well,” Julian Evans-Pritchard said in a report. He noted that the last such shift was in late 2008, during the global financial crisis, and that it may be followed by faster interest rate cuts in the coming year.
Monday’s meeting has set the tone for an annual economic planning meeting later in the week that will reaffirm policies for the coming year. |
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