Can China overcome its economic problems? From M.N. Gordon at economicprism.com:
“Never give a sword to a man who can’t dance.” – Confucius
Intervention from Beijing
Have Chinese stocks, supported by fresh government intervention, reached their bottom?
This week, from Monday through Thursday, the Shanghai Composite Index is up 5.52 percent. Similarly, over this time, Hong Kong’s Hang Seng Index is up 3.53 percent.
Still, these indexes have a lot of ground to make up. The Shanghai Composite Index is down 22.61 percent since September 2021. Meanwhile, the Hang Seng Index is down over 50 percent in the last six years.
Chinese stocks have lost a combined $7 trillion since 2021. The poor stock market performance has become an embarrassment for President Xi Jinping.
Several years ago, he was relishing in his nifty slogan: “The East is rising, the West is declining.” Now, he’s compelling regulators to devise a rescue.
In late-January, Beijing announced several interventions to, hopefully, stimulate the Chinese economy and revive the stock market. This week, on February 5, bank reserve ratio requirements were cut by 50 basis points. This is expected to free up about one trillion yuan ($139.04) worth of long term funds.
Beijing also relaxed rules to allow property developers to dip into commercial property loans to repay other outstanding borrowings.
Chinese officials have also intervened to stem the stock-market decline directly. Sovereign fund Central Huijin has vowed to buy more ETFs. China’s cabinet, known as the State Council, has called for forceful action to stabilize falling stock prices. Officials have quietly been prodding state-linked financial companies to buy A-share holdings to help limit the selloff.
Some economists anticipate more government spending on infrastructure. Though it is widely recognized that the days of multitrillion-yuan cash injections, like what rescued the economy after the financial crisis and a slowdown that followed a stock-market crash in 2015, are over.
Globalism removes all firewalls so the bumpy economy will be coming to FUSA?
If only Trumputler would turn off those orbital inflation lasers and make everything a human right, we could all live happily ever after drinking that free rainbow stew bubbleup in our everyone the same egalitarian Benetton gear. (s/)
Enemedia was on about inflation is finally resolved and rallying the wagons around Brandon’s cognitive impairment, at least the Great Reset Leap Forward is wildly entertaining if you have two brain cells and a synapse.
I’ve read too many satire pages today and don’t they have a printing press and too big to fail in the egalitarian workers utopia?