China’s top economic planner to hold briefing on Oct 8 as investors eye more stimulus

Singapore – China’s top economic planning agency will hold a press briefing on Oct 8 to discuss a package of policies aimed at boosting economic growth, as investors look for more stimulus measures from President Xi Jinping’s government.

The briefing, which is scheduled to start at 10am, will include five senior officials from the National Development and Reform Commission (ndrc), including chairman Zheng Shanjie, according to a notice from the government on Oct 6.

Economists and traders are closely watching for additional policy measures after China’s top leaders signalled a desire to draw a line under the nation’s growth slowdown.

Just before a week-long holiday in China, the government unleashed a slew of stimulus measures, including interest rate cuts, more liquidity to promote bank lending and a pledge of as much as US$340 billion (S$443 billion) to support the stock market.

Top Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) led a US$13 billion sector rally on Oct 7, after investors bet that Beijing will declare more policy or financial support for an industry central to its geopolitical ambitions.

Shares of SMIC, which Washington has blacklisted over allegations that it aids China’s military, rose as much as 28 per cent to their highest in four years. This took its gain since its close on Oct 3 to 65 per cent, or roughly US$10.7 billion of market value at the peak.

Smaller competitors Hua Hong Semiconductor and Shanghai Fudan Microelectronics Group also managed a combined gain of more than US$2 billion over the period.

Many investors expect Beijing – as it tries to jump-start the property and financial sector – to also extend a helping hand to semiconductors. Chips, the basic building block of technologies from artificial intelligence to electric vehicles, are at the heart of a longer-term conflict with the US for geopolitical supremacy.

Chinese shares have soared since late September as Beijing’s policy support reinvigorated investor confidence, with the Hang Seng China Enterprises Index gaining more than 30 per cent in the past month.

However, concerns are growing over whether the rally can be sustained, given that China has seen several false dawns before, including a rally in February that completely unwound.

While the NDRC notice did not provide details about the briefing, expectations are rising among analysts for Beijing to expand public spending as part of its stimulus package.

A prominent Chinese economist recently said that the country has room to ramp up fiscal support by issuing as much as 10 trillion yuan (S$1.86 trillion) in special debt. BLOOMBERG