Happy Weekend Everyone!
Here’s quick recap of top news in China’s market over the past week.
China’s GDP grew by 4.6% in the third quarter, a slight dip from 4.7% in the previous quarter but still beating market expectations. September brought some good news, with most key economic indicators showing improvement.
Industrial production growth bounced back after slowing for four months, retail sales grew fastest in four months, and fixed-asset investment growth stabilized after widening for five months.On the downside, exports, which had been a major driver earlier this year, faced bumps. September saw exports grow at the slowest pace since May and imports also slowed amid weak domestic demand.
In real estate, the decline in investment narrowed in September, and property sales weren’t falling as fast anymore. But home prices in major cities continued to drop, with across-the-board falls in the second-hand market.To support the housing sector, the government announced plans to renovate an additional 1 million units in urban villages and dilapidated housing in a monetized approach, hoping to reduce housing inventory. Several more cities also joined the trend of easing property policies, with Tianjin fully removing housing restrictions.
In the stock market, the PBOC officially launched its special relending facility to support stock buybacks and shareholding increase by major shareholders. It also released details on the Securities, Fund, and Insurance Swap Facility to enhance market liquidity.PBOC Governor Pan Gongsheng hinted that the benchmark lending rate LPR, set to be released on Monday, could drop by 0.2 to 0.25 percentage points. In addition,China’s biggest state-owned banks cut deposit rates agains this wee, the second round this year.
Several institutions updated their forecasts on the Chinese economy and policies. Goldman Sachs raised its 2024 GDP growth forecast to 4.9% from 4.7%. UBS projected China’s debt restructuring to top 3 trillion yuan by 2025 and that the country’s growth might reach its 5% target if fiscal policies are fully implemented. CITIC Securities thinks China could raise its deficit to around 5% next year and implement a one-time, 3 trillion yuan debt restructuring.
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