Goldman Sachs On China Policy Stimulus

Goldman Sachs Weighs in on the China State Council meeting from the end of last week.

"Premier Li Qiang chaired the State Council meeting today (June 16th) and instead of releasing concrete policies measures, Li Qiang only hinted that a basket of growth-promoting policies could be released soon. We continue to expect further policy easing measures (such as acceleration of government bond issuance, further property policy easing and potentially more supportive measures to boost consumption) to be announced in the next few weeks.

Following PBOC's OMO and MLF interest rate cuts earlier this week, in the State Council meeting, Premier Li Qiang hinted a basket of growth-promoting measures could be announced soon. The statement itself could be slightly disappointing as market had expected more concrete measures to be rolled out from the State Council meeting. The meeting statement claimed that "external environment changes hindered growth recovery. Policymakers should thus roll out more forceful measures in response to changes in economic situation". In particular, Premier Li stated that, focusing on "strengthening macro policy adjustment, effectively expanding demand, enhancing real economic development and reducing key risks", policymakers explored and proposed a basket of growth-promoting policies. Li Qiang urged detailed measures to be rolled out soon."