Equities: Moar Cowbell
At the IMF and World Bank annual meetings this week in Washington, deputy Chinese policymakers provided critical guidance for the on-going stimulus rollout.
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Discussion
At the IMF and World Bank annual meetings this week in Washington, China’s stimulus plans appear to have dominated side conversations among global fiscal and monetary authorities, with deputy Chinese officials providing key stimulus detail hints and demonstrating a constructive sensitivity toward the opinions of global peers.
Through Bloomberg reporting we now know that skepticism toward China’s stimulus plans is not just confined to market participants. Few policymakers, if any, outside of China believe that China has gone far enough with demand-push stimulus measures to rebalance its economy away from the low-cost manufacturing that places its export machine directly in the line of developed market tariff fire and toward domestic-oriented consumption. This is a good thing. A very good thing.
China’s policymakers simply cannot afford to undershoot on stimulus given the structural deflationary state of its economy, and given the global charm offensive currently underway, it’s clear outside pressure to boost stimulus is going to have an impact on the headline figure that comes out of the critical November 4-8 NPC gathering.
With the above in mind, let’s look at the stimulus guidance provided on the sidelines of this week’s DC policymaker confab.