Anindita Chatterjee
Updated on: October 17, 2024 1:51 am GMT
China is set to reveal a significant action plan to boost its struggling economy, with all eyes on a press briefing scheduled for October 8. The National Development and Reform Commission (NDRC), China’s top economic planner, will detail policies aimed at stimulating growth amidst ongoing investor concerns about the nation’s economic performance.
Press Briefing Details
The briefing will take place at 10 a.m., featuring five senior NDRC officials, including chairman Zheng Shanjie. Investors and analysts are eagerly anticipating new measures that could signal a turning point for China’s economy. Recent signs from the country’s leaders indicate a strong desire to revive growth, making this briefing particularly significant.
- Date and Time: October 8, 10 a.m.
- Participants: Five senior NDRC officials, including Chairman Zheng Shanjie.
Investor sentiment has been shifting, especially after China implemented various stimulus measures just before a week-long holiday. These initiatives included:
- Interest rate cuts
- Increased liquidity to encourage bank lending
- A commitment of up to US$340 billion (approximately S$443 billion) to support the stock market
Market Reactions and Expectations
The announcement has sparked interest across financial markets, particularly in the semiconductor sector. Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) saw its shares soar by as much as 28%, marking a remarkable rise in its market value since early October. This surge is part of a broader rally that has added US$13 billion to the sector.
According to reports:
- SMIC’s shares climbed to their highest level in four years.
- The company’s value increased by 65% since its last closing price on October 3, adding around US$10.7 billion in market cap during that time.
Smaller firms in the semiconductor space also enjoyed gains, with Hua Hong Semiconductor and Shanghai Fudan Microelectronics Group collectively adding over US$2 billion in market value.
Geopolitical Ambitions and Investor Sentiment
Investors are optimistic that the Chinese government will extend additional support to the semiconductor industry, which is crucial for nearly every sector, ranging from artificial intelligence to electric vehicles. This optimism is fueled by the ongoing competition with the United States for global technological supremacy.
Since late September, Chinese shares have generally surged, boosted by government policy support and renewed investor confidence. The Hang Seng China Enterprises Index has jumped more than 30% in just one month. However, uncertainty looms over whether this rally can be sustained, especially given past experiences where similar market upswings fizzled out quickly.
Economic Support: What Lies Ahead?
While the details of the NDRC briefing remain under wraps, analysts predict that China may introduce measures to widen public spending as part of its stimulus package. Notably, a prominent Chinese economist has suggested that the country has the potential to increase fiscal support by issuing as much as 10 trillion yuan (around S$1.86 trillion) in special debt.
Such a move could provide a significant boost to China’s economy, which is grappling with sluggish growth and various external pressures. The spotlight on public spending aligns with the government’s objectives to rejuvenate the financial markets, particularly as the property sector continues to recover from earlier challenges.
Investor Watch: Concerns Persist
As anticipation builds, investors remain cautious. Previous efforts to rejuvenate the economy have often led to what analysts call “false dawns.” February’s market rally, for example, quickly unraveled, leaving many wondering if the current excitement is sustainable. The upcoming briefing will play a critical role in shaping market expectations and could influence investor strategies in the weeks to come.
In essence, the upcoming NDRC briefing is one of the most anticipated economic events for China, and it will likely have lasting effects on investor sentiment and market dynamics.
With the potential for increased spending and support across key sectors like semiconductors, many are hopeful that this time, the government’s actions will lead to a more robust and sustained recovery for the Chinese economy.
Stay updated on China’s economy and how its markets are changing.
