China takes the stage with long awaited stimulus package

China takes the stage with long awaited stimulus package

The Chinese government today announced a planned economic stimulus aimed at bolstering and supporting economic growth in the country. The Chinese economy has faced significant challenges in recent years, particularly due to the sharp downturn in the real estate sector following the collapse of Evergrande, a major player in the industry. This stimulus package follows increasing concerns from economists about China's ability to achieve its targeted 5% growth for the year. The stimulus includes funding for brokers and insurance companies to purchase stocks, with the aim of driving a recovery in share prices. Additionally, there will be support for companies to engage in stock buybacks at more favourable valuations. The People's Bank of China (PBoC) also announced more favourable terms for the ongoing destocking plan, allowing state-owned enterprises to purchase unsold inventory from property developers. Despite scepticism regarding the speed at which the government is acting and its potential to influence this year's growth figures, the market response was positive. The CSI 300 closed up 4.33%, and the Hang Seng rose by 3.95% at the time of writing.