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CHINA: Fresh Fiscal Package Could Reach CNY 10trl, Larger Under Trump

CHINA
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Outside of the UK Budget and US election, much market focus remains on China's NPC Standing Committee meeting due from Nov 4 - 8 next week and worth noting that while headlines at the time suggested the focus would be on the appointment and removal of officials, further details on stimulus or a fiscal package could be forthcoming - particularly as Chinese allows the NPCSC to delay the disclosure of agenda items until they've been formally approved.

  • This last Reuters exclusive goes into more detail on what's being considered: a fresh fiscal package worth over CNY 10trl, with China planning to raise debt via special treasury and local government bonds over the coming few years. The package would include proceeds to address debt risk (CNY 6trl) and for acquiring local land (CNY 4trl). The package could be larger in the event of a Trump victory, according to the report.

In terms of timings for a potential fiscal announcement from China - an announcement is unlikely before November 8th (the final day of the NPC meeting), and that also allows the NPC to gauge the election results in the US to make any tweaks to the statement.

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Outside of the UK Budget and US election, much market focus remains on China's NPC Standing Committee meeting due from Nov 4 - 8 next week and worth noting that while headlines at the time suggested the focus would be on the appointment and removal of officials, further details on stimulus or a fiscal package could be forthcoming - particularly as Chinese allows the NPCSC to delay the disclosure of agenda items until they've been formally approved.

  • This last Reuters exclusive goes into more detail on what's being considered: a fresh fiscal package worth over CNY 10trl, with China planning to raise debt via special treasury and local government bonds over the coming few years. The package would include proceeds to address debt risk (CNY 6trl) and for acquiring local land (CNY 4trl). The package could be larger in the event of a Trump victory, according to the report.

In terms of timings for a potential fiscal announcement from China - an announcement is unlikely before November 8th (the final day of the NPC meeting), and that also allows the NPC to gauge the election results in the US to make any tweaks to the statement.

Keep reading...Show less