Authorities Announce Measures To Boost Household Consumption

Headlines have crossed that the authorities are aiming to boost household consumption. A variety of measures will be utilized: the authorities will encourage financial institutions to strengthen credit support for households by providing loans at reasonable rates. The other focus will be on improving the quality of household goods and boosting the innovation of smart appliances for homes.

• The authorities will also kick off household goods promotion and encourage service platforms to create online platforms for household consumer services.
• These moves come in the wake of yesterday's slightly larger than expected fall in retail sales growth. A firmer uptick in household/consumer spending has largely been missing from the post Covid China economic rebound. No doubt these policies are aimed at improving these trends are we progress through H2.
• The market impact for these announcements has been fairly modest. USD/CNH sits below session highs, last around 7.1760, which is close to NY closing levels from Monday. Onshore equities are in the red (CSI 300 last down ~0.30%), as is Hong Kong's index. The consumer discretionary index of the CSI 300 is back in positive territroy though, last +0.24%.