MNI China Press Digest Oct 26: Deficit Ratio, Investment, HK

Highlights from Chinese press reports on Thursday:

• China’s 2024 budget deficit-to-GDP ratio may also break through the 3% red line, after the issuance of CNY1 trillion of China Government Bonds pushing this year’s deficit ratio to 3.8% from the 3% set in March. A 3-3.5% deficit ratio may be enough, if policymakers set the 2024 growth target about 5%, said Zhang Yu, chief macro analyst at Huachuang Securities. The decision to increase the issuance of treasury bonds during the year will not become routine, as it only occurs when the economy and society encounter unexpected shocks, said Ming Ming, chief economist at CITIC Securities. (Source: 21st Century Business Herald)
• China will begin several major water conservancy projects in Q4, according to Chen Min, vice minister of water resources. At a press conference Chen said the Ministry of Water Resources will focus on post-disaster reconstruction and ensure 2023 investment in water conservancy exceeds 2022 levels. Dongguan Securities noted the government has taken unprecedented action to announce new treasury bonds to support water management and disaster relief, and the workload of infrastructure is expected to increase significantly in 2024. (Source: Yicai)
• Hong Kong will cut the stamp duty on stock transactions to 0.1% from 0.13%, Chief Executive John Lee Ka-chiu said in his annual policy address on Wednesday. A 10bp cut on stamp duty will help increase the spot market trading volume by about 10-12%, according to a research note by Goldman Sachs. Other measures to boost the competitiveness of Hong Kong's capital market include establishing funds to invest in projects related to the Greater Bay Area, promoting the listing of overseas issuers, facilitating the repurchase of shares by listed companies, and promoting yuan-denominated transactions of Hong Kong stocks. (Source: Shanghai Securities News)