Cartoons

Stimulating viewing

rural-buy-electronics-w

China’s economy grew 6.4% in the first quarter versus the same period last year, better than most analysts expected. The main take: that the government has shifted from worrying about deleveraging to stabilising growth.

Similar thinking has been stirring speculation that Beijing is poised to launch another round of measures to boost local consumption. The country’s carmakers are especially hopeful of larger quotas for licence plates in major cities for new buyers, for instance, as well as subsidies for people who exchange older cars for electric or hybrid vehicles. Rural sales subsidies for home appliances costing less than Rmb800 ($118) are also said to be under consideration, plus a plan for trading in older smartphones for new ones.

Stocks then fell on Tuesday after comments from President Xi Jinping about “structural deleveraging” were taken to mean that new stimulus measures weren’t such a sure thing after all. The National Development and Reform Commission, the nation’s economic planning body, even took the unusual step of downplaying a draft of the measures that had been doing the rounds, telling state television that “repeated research” was required first.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.