Chinese Investors Disappointed by Ministry’s Silence on Stimulus: Anticipated Measures and Financial Changes Explored

Chinese investors remain unsatisfied as the ministry stays silent on the stimulus plan. The absence of strategies to stimulate an unstable market during a high-profile meeting held by China’s Ministry of Finance has led to investor dissatisfaction.

Despite this, experts continue to predict that the department will implement some slight stimulus initiatives. These could include a rise in the fiscal deficit ratio from the existing 3 per cent, additional release of ultra-long special treasury bonds and local government bonds, coupled with tax reductions.

During the hour-long meeting, the department introduced several modifications aimed at assisting communities and the monetary system. These included increasing the limit on borrowings and accessing funds from an untouched government bond quota, providing financial assistance for the real estate market, and restoring capital for significant public banks.

Financial Minister Lan Foan stated that local governments facing financial difficulties could utilize up to 2.3 trillion yuan (equivalent to US$325.3 billion) in special bond funds for the final quarter of the year.

The federal administration is also set to implement a single, substantial rise in the debt limit to exchange the covert debts of local governments, which the minister dubbed "the most impactful strategy for debt reduction launched in recent times".