China Policy Officials and PBoC Governor Vow to Offer More Stimulus Support

Li Chen
06 Jan, 2025
Hong Kong

Investor sentiment in China and Hong Kong remained subdued amid worries of ongoing economic growth deceleration and lack of corporate earnings growth. 

The Hang Seng index declined 0.4%, and the mainland-focused CSI 300 index dropped 0.2% amid fading hopes of imminent steps by Beijing to revive consumer spending. 

Over the weekend the People's Bank of China announced its plans to offer more liquidity support for the purchase of stocks to institutional investors. 

The country's top economic planner said that China plans to expand its trade-in program to cover industrial equipment, computer devices, and other electronic items.

In 2025, China's trade-in program will cover many industrial equipment categories and personal computing devices funded by long-term bonds, said Yuan Da, deputy secretary general of the National Development and Reform Commission, at a press conference held on Friday. 

As of August, Beijing had distributed 150 billion yuan, or about $21 billion, to local governments to subsidize purchases of home appliances and electric vehicles. 

However, the trade-in program is likely to be less effective in 2025 amid waning demand for durable goods and falling retail sales in Beijing and Shanghai. 

Leaders of the Shanghai and Shenzhen stock exchanges confirmed that they recently held meetings with foreign investors reaffirming their commitments to capital markets reforms. 

Despite public announcements by policy officials and market regulators, market sentiment remained negative amid ongoing weakness in the property market and the manufacturing sector. 

The Caixin Manufacturing PMI eased to 50.5 in December from 51.5 in November, confirming the slowdown reported by the official measure reported by the statistical bureau on December 31. 

The Caixin China General Services PMI rose to 52.2 in December from 51.5 in November, a seven-month high. 

The services sector activities accelerated amid rising domestic orders despite falling export orders. and upbeat sentiment. 

 

China Stock Movers 

The Hang Seng index decreased 0.4% to 19,683.12, and the mainland-focused CSI 300 index fell 0.2% to 3,767.0. 

Tech stocks advanced in the hopes of higher sales after policymakers vowed to expand the trade-in program. 

Lenovo Group increased 0.7% to HK $9.90, SMIC gained 0.7% to HK $29.75, and Contemporary Amperex Technology Co Ltd decreased 0.6% to ¥255.88. 

China Vanke Co. Ltd. decreased 1.4% to HK $5.02, China Resources Land fell 1.1% to HK $22.20, and Longfor Group Holdings fell 0.1% to HK $9.90. 

Alibaba Group declined 0.5% to HK $82.15, Baidu Inc. fell 0.6% to HK $80.60, JD.com added 1.1% to HK $135.60, and Meituan dropped 3.1% to HK $148.90.