From NBC Universal:

The Chinese central bank has announced a 50 basis point reduction in the reserve requirement ratio, releasing 1 trillion yuan in long-term capital to help boost China’s economy and stock markets. Investors will continue to look for further signs and acts of policy support. Beijing has been reluctant to use massive stimulus measures, focusing on stabilizing the property market instead.

The central bank’s RRR cut exceeded forecasts and Governor Pan Gongsheng told reporters that CNFA would soon publish measures to encourage banks to lend to developers.

Chinese stocks have dropped to multi-year lows, drawing concerns about the economy. An official readout stated that stronger measures were called for to boost market stability, and in a separate report, it was stated that Chinese authorities are looking to utilize state-owned companies’ funds to stabilize the market.

Expectations are growing for fiscal support for China’s economy, with the possibility of the country revealing a wider fiscal deficit and other policies for the year ahead. Chinese leaders are calling for a fresh round of fiscal reform during their annual Central Economic Working Conference in December, with details to be released in early 2024.



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