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Discussion
In my WOTE Asset Management update this weekend I said the following with regard to China’s MoF press briefing Friday evening (Saturday morning Beijing time):
Not only did the MoF forcibly address two of the four issues communicated September 26 - local government debt relief and bank capital injections - the door was swung open to some form of a QE program to mop up excess real estate capacity. I’m on close watch for a follow-on announcement from the PBOC about coordinating with the MoF on special bond issuance used to fund local government debt relief.
I believe there is a better than average chance that some form of a QE program is set to arrive this week.