Xi’s plan for stimulus and stock market boost fails to convince China traders

Xi’s plan for stimulus and stock market boost fails to convince China traders

China will launch a new stabilization package including about 2 trillion yuan ($278 billion) to buy mainland shares via offshore trading links in the coming days, government sources say. This would come after a market rout that has erased more than $6 trillion in market value from mainland China and Hong Kong stocks since a peak reached in 2021. And certainly China’s stocks rallied on the news. The NASDAQ Golden Dragon Index of Chinese stocks traded in the United States closed up 4.84% today, Tuesday, January 23. But considering the extent of the losses and its duration, I’d count a less than 5% gain–especially since the index was up by more than 6% earlier in the day.

Good news/bad news from China on stimulus

Good news/bad news from China on stimulus

Chinese officials have indicated that the government is considering issuing 1 trillion yuan ($139 billion) of new debt under a special sovereign bond plan. The plan would sell ultra-long sovereign bonds to fund projects related to food, energy, supply chains, and urbanization. The sale of this type of ultra-long bonds is rare: In the aftermath of the Asian Financial Crisis in 1998, for example, the government issued special debt to replenish capital for major state-owned banks. The most recent sale was in 2020, when authorities issued 1 trillion yuan worth of those bonds to pay for pandemic response measures. The new round of stimulus is good news for a global economy that has been struggling with lagging growth as China’s economy has slowed. But the plan is bad news for anyone worried about the deep structural problems facing China’s economy.

How many people have died from Covid in China? All we know is that the government is lying and that the stock market is about to get a big boost

How many people have died from Covid in China? All we know is that the government is lying and that the stock market is about to get a big boost

In the week leading up to the Lunar New Year festival, the official count for the number of Covid deaths in China after the chaotic end of the country’s 0-Covid policy was 12,658. That brought the total reported by China’s Center for Disease Control and Prevention to an official 59,938. Outside experts calculate that the true total is much, much higher. Airfinity, a healthcare data crunch puts the number at 640,000.

July 7 commodities rally hangs on new stimulus speculation from China

July 7 commodities rally hangs on new stimulus speculation from China

Commodity stocks rallied big time on Thursday, July 7, on news that China’s Ministry of Finance is considering allowing local governments to sell 1.5 trillion yuan ($220 billion) of special bonds in the second half of this year. This would be a huge expansion of the borrowing capacity of local governments–which had looked to be only around $330 million after local governments sold most of the year’s quota in the first half–and would provide a boost to infrastructure spending and China’s economic growth. The news comes as fears grow that China’s economy won’t meet the official goal of 5.5% growth in 2020.

Notes You Need for April 28: Mall re-openings, Macao casino traffic, consumer confidence drop, reverse split for USO, China GDP target, TSLA vs Xpeng, Samsung forecasts drop, $565 expected in infrastructure stimulus in China

Notes You Need for April 28: Mall re-openings, Macao casino traffic, consumer confidence drop, reverse split for USO, China GDP target, TSLA vs Xpeng, Samsung forecasts drop, $565 expected in infrastructure stimulus in China

In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don't justify a full post. I've decided to start compiling these notes here each day in a kind of running mini blog that I'm calling Notes...
More stimulus on the way in China

More stimulus on the way in China

It looks like looser monetary policy is on the way in China for 2020. Chinese Premier Li Keqiang said Monday the government will study further cutting bank reserve requirements in 2020. It's a good bet that the Premier would have raised the possible policy change if...