Welcome to the 231st edition of Trade War.
Separate press conferences by the NDRC and Ministry of Finance fail to deliver details on major stimulus package. And the World Bank predicts China’s GDP growth to slow to 4.3% in 2025, down from 4.8% this year.
Number of Chinese billionaires rises from 46 to 55, on recent stock market boom. Xi Jinping aims to create a self-reliant, technologically-powerful economy. And 500 million low-skilled workers to be left behind with this industrial strategy.
EU opens anti-dumping investigation into Chinese plywood. Taiwanese managers from Foxconn detained in Zhengzhou. And even as Beijing’s relations with world worsen, Western consultants and auditors continue to find lucrative business in China.
Notable/In depth
A Beijing-based former investment banker turned music impresario reshapes views on trade
Thousands of copies of Trump’s ‘God Bless the USA’ Bible printed in China
“Republicans and Democrats suffer from a blindness to the resilience of the Chinese Communist Party and of China’s economy,” writes Jeremy Goldkorn
NDRC disappoints with measly stimulus numbers
It’s been a week of disappointing press conferences.
First, it was the National Development Reform Commission speaking on Tuesday, where China investors’ hopes for the announcement of a big stimulus—two or more trillion yuan according to some estimates—came to naught.
Instead, China’s economic planning agency announced a measly 200 billion yuan ($28 billion) in spending advanced from next year. That helped trigger a stock market selloff with the benchmark CSI 300 index down 7.1 percent on Wednesday and Hong Kong’s Hang Seng Index, dropping 1.4 percent, one day after its Tuesday rout.
“I don’t know what the chairman of the NDRC was thinking with this,” said Natixis SA economist Alicia Garcia Herrero. “Frankly the more they wait to clarify, the worse it can be because people will realize there’s no fiscal side to this stimulus—that it’s all monetary, propping up stocks and so on. And that’s quite dangerous.”
Finance ministry isn’t forthcoming either…
Tuesday’s disappointment didn’t stop market watchers from pinning their hopes on a second presser, held Saturday by China’s finance ministry, but that disappointed too.
Rather than put any number to the hotly-anticipated big stimulus, Finance Minister Lan Fo’an instead suggested investors would have to wait longer for more detail, perhaps until China’s legislature meets in the coming weeks.
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