HONG KONG (AFP) – Hong Kong led a surge across Asian markets yesterday after China’s leaders pledged fresh measures to boost the nation’s stuttering economy, building on optimism that central banks were nearing the end of their rate-hiking cycle.
With data in recent months showing growth stuttering and business activity slowing, Beijing has come under pressure to provide much-needed support, particularly for the vast property sector.
Despite a series of announcements and minor interest rate cuts, investors have been largely disappointed by the policy response from authorities, with very few concrete measures being unveiled.
However, top leaders on Monday signalled a fresh push to get the post-Covid recovery back on track, particularly the troubled property sector, which accounts for a major part of the world’s number-two economy.
After a meeting, the 24-person Politburo recognised the current economic operation is facing new difficulties and challenges and agreed they must implement precise and effective macroeconomic regulation, strengthen countercyclical regulation and policy reserves.The meeting, headed by President Xi Jinping, also called for efforts to expand domestic consumption and adjust and optimise real estate policies in a timely manner, according to state broadcaster CCTV.
“The overall stance remains in a pro-growth mindset, but the focus is more forward-looking with an increased emphasis on addressing structural challenges (ie local government debt) to facilitate longer-term sustainable growth,” said Erin Xin at Hongkong and Shanghai Banking Corporation.
The announcement keeps a supportive tone, which can help provide some support for the recovery and it may provide some boost to market sentiment, she added.
While it was nowhere near the blockbuster spending plans seen in the past, the news gave investors a boost, with Hong Kong jumping nearly four per cent thanks to a rally in real estate companies and tech giants.
Among the standout performers were developers Country Garden and Sunac, which piled on at least 17 per cent each.
