Will implement more proactive fiscal policy and moderately loose monetary policyTo enrich and improve policy toolboxMust expand domestic demand in all directionsMust vigorously boost consumptionTo expand opening up to the outside world, stabilise foreign trade and investmentWill step up “unconventional” counter-cyclical adjustmentsWill enhance support to improve people’s livelihoodsTo stablise property and stock markets
The big change here is that China says that it will shift towards a “moderately loose” monetary policy. That’s a signal that they will go even bigger on easing measures going into next year.
That is giving a bit of life into Chinese assets, with the Hang Seng now turning losses into gains after domestic markets have closed. In turn, AUD/USD has also nudged up from around 0.6385 earlier to 0.6405 currently.
It’s a notable change on the part of Beijing as they are working rather desperately to try and revive domestic demand conditions. But again, this is all high level commentary and further easing on the part of the PBOC is well expected. The question for a while now has been how much fiscal support can the government really deliver in tandem. And that remains to be seen still.
This article was written by Justin Low at www.forexlive.com.
