MoF confirms stimulus details coming November 8
There’s no longer any doubt: Details of Beijing’s fiscal stimulus will be released following the upcoming meeting of the legislature (NPCSC).
On Friday, Deputy Finance Minister Liao Min confirmed that the details will be released on November 8, at the meeting's conclusion.
- Liao was speaking to Bloomberg in an interview in Washington, DC.
Echoing comments made by his boss in mid-October, Liao said this round of economic support policies will be “quite large.”
Liao said the goal of Beijing’s stimulus is:
- “To enhance the strength of macro policies to expand domestic demand and reach this year’s GDP growth target [and to]...coordinate with monetary policy to push for the restructuring of the economy, particularly to boost domestic demand including consumption"
Some context: At the end of September, the Politburo teased that additional fiscal support was coming.
- The Politburo statement was preceded by a raft of monetary adjustments clearly aimed at accommodating increased government bond issuance – further heightening expectations.
More context: The NPCSC was supposed to meet in October, but last week its leadership announced the meeting had been pushed to November 4-8.
Get smart: A lot is riding on the fiscal package.
- A big enough package, directed at the right areas, will go a long way toward restoring business and household confidence, and potentially sustain the stock market rally over the long term.
- If it’s too small, it will deal another major blow to confidence – and put pressure on Beijing to roll out another stimulus package in the near future.
Our take: Anything less than RMB 3 trillion will be a disappointment.