China steers clear of market overreaction on road to recovery
Measures taken by Beijing seek to put the country on a stable upwards trajectory and on course to meet this year’s growth rate
China has reported third-quarter economic growth of 4.6 per cent year on year. It is the lowest rate for more than a year, but in line with market expectations. The mainland economy remains on course to grow by “around 5 per cent” this year, the target announced by Premier Li Qiang.
It could still get a boost from aggressive government support measures, first unveiled less than a month ago and since supplemented with more announcements.
Markets have ebbed and flowed with the news, reflecting some disappointment that it did not amount to massive stimulus.
The Chinese authorities have learned the lessons of the financial crisis of 2008 and the stock market rout of 2015.
They want the economy and the markets to recover, but on a stable upwards trajectory, rather than a raging bull market.
Government can play a part with loud and clear signals. In that regard, Beijing is now determined to turn the tide and steer the economy back to a stable development trend that is reflected in the markets.
A beleaguered property sector that is weighing on the entire economy has been targeted with support, the latest being a near doubling of funding to 4 trillion yuan (HK$4.4 trillion) for a “white list” of pre-qualified projects and developers.