ING has taken an optimistic view of the Saturday briefing from China’s Ministry of Finance (MoF). Say the MoF highlighted key priorities aimed at stabilizing the property market and addressing local government debt issues. The ministry signaled that special bonds would be issued to support both bank recapitalization and real estate stabilization efforts. Additionally, the briefing included references to the use of debt replacement tools designed to alleviate fiscal pressures faced by local governments.
ING say that while markets may be eager for a swift resolution and a clear headline figure, the complexity of the fiscal stimulus process suggests it may take some time for concrete measures to emerge. Analysts point out that the implementation of these initiatives is likely contingent upon approval from the National People’s Congress (NPC), whose meeting is expected toward the end of October.
Despite the market's impatience for immediate clarity, the outlook remains positive. "We expect more detailed procedures and solid numbers to follow the NPC's approval," analysts say. As such, markets may need to exercise patience as further details are anticipated to roll out over the coming weeks and months.
The ministry’s signals offer reassurance, reinforcing expectations that comprehensive measures will be introduced to stabilize key sectors of the economy while addressing mounting debt challenges.
