BEIJING: China said on Tuesday (Oct 8) it was “fully confident” of hitting its growth target this year but held off more stimulus, disappointing markets and fuelling concern about a lack of detail on a raft of measures unveiled last month.
Beijing has struggled to reignite business activity as officials target around 5 per cent expansion, which analysts say is optimistic given the numerous headwinds, from a prolonged housing crisis to sluggish consumption and local government debt.
All eyes were on a news conference led by Zheng Shanjie, head of China’s National Development and Reform Commission, on Tuesday, and investors hoped Beijing would unveil more economy-boosting policies.
But Zheng and colleagues refrained from laying out any new stimulus – instead reiterating that “the fundamentals of our country’s economic development have not changed”.
“We are fully confident in achieving the goals of economic and societal development for the year,” the top economic planner said.
“We are also fully confident in maintaining stable, healthy and sustainable development,” he added.
Markets in mainland China had soared 10 per cent on the opening as traders resumed a blistering rally after a week-long break hoping for more measures from Beijing.
But they pared those gains as the news conference progressed with few concrete details and Shanghai ended the morning just 4.8 per cent higher, while Shenzhen added 7.7 per cent. Hong Kong tumbled more than 5 per cent.
“Tuesday’s press briefing from China’s top economic planner … was supposed to be the big moment, the one where Beijing unleashed a stimulus bazooka,” Stephen Innes, Managing Partner at SPI Asset Management said in a note.
“Instead, it was more of a pop gun,” he said.
“It’s clear the market wanted more, and Beijing’s reluctance to roll out a bigger package is raising serious doubts about the sustainability of this rally,” Innes added.
And Heron Lim at Moody’s Analytics said: “Market hopes of even more fiscal stimulus that reaches the ‘big bang bazooka’ level look dashed with the press conference.”
