Business
China’s Stock Market Frenzy: A Deep Dive into the Recent Sharp Declines and Predictions for Fiscal Policy Constraints
Shares in China experience a drop in both Hong Kong and domestic markets as traders take profits following a trading frenzy. The Hang Seng Index in Hong Kong decreased by 1.4 per cent, further contributing to its dramatic 9.4 per cent drop from Tuesday, while the CSI 300 Index, which represents the onshore stocks, dipped by 7.1 per cent.
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Ups and downs: Is China's stock market craze maintainable?
Morgan Stanley suggests that China's capacity to introduce a significant fiscal stimulus may be limited due to elevated public debt, declining tax income, and a policy inclination towards investment rather than consumption.
"Existing large budget shortfalls and elevated public debt levels imply that decision-makers will exercise caution," stated the US investment bank in a Tuesday report. "We anticipate modest financial boost efforts aimed at spending in the immediate future."
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