The State Council Information Office of China held a highly-anticipated press conference on Saturday, led by Finance Minister Lan Fo'an.
The market was hoping for further announcements on fiscal stimulus after an invitation said to media said officials would outline the country's plans for intensifying countercyclical adjustments to its fiscal policy.
Instead, the press conference was light on plans and details, including the value of stimulus. Officials highlighted significant borrowing capacity at the national level and pledge to "significantly increase" debt and said they were studying more counter-cylical measures.
"There is still relatively big room for China to issue debt and increase the fiscal deficit," said Lan.
Lan highlighted that local governments have 2.3 trillion yuan in local debt fund to spend in the last 3 months of the year but those are from bonds that have already been issued (and are know) but not yet used. He highlighted that they have the opportunity to buy unused housing units to turn into affordable housing, which is part of Beijing's larger strategy to firm up the housing market.
The result is that we will have to wait until legislative meetings in the coming weeks for real policy announcements, though it sounds like they're coming and will be announced "step-by-step," according to Lan.
Does the market have the patience to wait? I'm skeptical.
