Replying to Avatar Peter Alexander

Once again, zero fiscal stimulus out of Beijing. Ignore the headlines and all the talking heads that focus entirely on the top line number.

As expected, what was announced was a massive local government debt restructuring program. The priority is to clean up “shadow banking” finances.

Left pocket is just paying the right pocket. Zero stimulative effect.

China announces $1.4 trillion package to tackle local governments' 'hidden' debt https://www.cnbc.com/2024/11/08/china-expected-to-announce-highly-anticipated-fiscal-stimulus-package.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

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hh 1y ago

They're increasing the debt ceiling for local governments though.

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Peter Alexander 1y ago

Yes, but all funds raised will be applied towards fully retiring “shadow banking” financing. Zero economic benefit.

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