“The politburo meeting sends a signal that China may roll out fiscal stimulus and supportive monetary policies to resolve financial risk and stabilize markets should external demand weaken,” KGI Securities Ken Chen, told Bloomberg, adding that this “has boosted sentiment on the market, especially for blue chips.”
So there you go. Bailed out by Beijing. Although I guess the question here is the same as it always is. Namely, how do they plan to reconcile this with deleveraging? Or, more to the point vis-a-vis fiscal stimulus, aren’t they supposed to be purging excess capacity in an effort to cut down on shit like ghost cities, etc? Is fiscal stimulus really consistent with that?
