Subnostr

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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Discussion

hh 1y ago

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

Peter Alexander 1y ago

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

Diego Valley 1y ago

Some say they were waiting for elections and fed meeting to take fiscal stimulus. Looks like folks were wrong on that front

Peter Alexander 1y ago

The talking heads in the West just don’t know how to wrap their collective heads around a policy centered on fiscal responsibility. That is what #China is focused on.

Connie 1y ago

The correct term is Debt Restructuring. This way they will know the risk involved, where they stand and how much they will really need to as a stimulus. They’re taking their time for the big step.

Peter Alexander 1y ago

Yes. Very well said. Thank you.

Connie 1y ago

You’re welcome 💜