HK financial secretary says China’s economy will rebound quickly
China’s economy is expected to recover quickly after a Covid-19 pandemic-induced hit, said Hong Kong Financial Secretary Paul Chan. To get more economy news today, you can visit shine news official website.
“In a complex and cloudy global economic environment, the situation in the mainland is relatively good,” Chan said at the Caixin Summer Summit via a video conference on Saturday (July 9). China’s economy can rebound and maintain stable growth for the rest of the year amid various economic measures, he said.
Chan’s comments come as signs mount that China’s economy shrank in the second quarter for the first time since 2020, following various virus-related lockdowns. A quarterly drop in gross domestic product (GDP), which has only happened once before, underlines China’s slower rebound from coronavirus curbs than in 2020, providing less of a boost to a struggling global economy.
For Hong Kong, a more outward-facing financial hub, the impact of global economic woes are inevitable, but medium-term prospects remain bright, Chan said.
Chief Executive John Lee told the summit earlier on Saturday that his new Cabinet is committed to building Hong Kong into a more open and vibrant city. Lee was sworn in as the city’s leader last week.
Both Lee and Chan made references to Chinese President Xi Jinping’s speech during the handover anniversary on July 1. They reiterated Xi’s statement that the “one country, two systems” governing principle is here to stay, and that Hong Kong’s economy can grow with the backing of the mainland.
Just as we predicted over a year ago, China - which remains painfully limited in how it can kickstart its slowing economy - is preparing for a massive fiscal stimulus in the form of a tidal wave of local government bond sales. With growth in the world's second-largest economy faltering especially after China's President Xi Jinping made clear weeks ago that "Covid zero" isn't going anywhere, there is also "chance zero" that Beijing's 2022 growth target of 5.5% will be achieved because of the lingering threat of new lockdowns.
China's slowdown recently forced the People's Bank of China to cut key interest rates for long-term loans to cushion the property slump and lockdowns. Meanwhile, as doubts rise that China will rebound like prior economic downturns, policymakers are set for round two of stimulation: an infrastructure splurge.
Bloomberg reports that China's Ministry of Finance is considering allowing local governments to sell a whopping 1.5 trillion yuan ($220 billion) of "special" local bonds in the year's second half. The people said the bonds would bolster the struggling economy.
"The bond sales would be brought forward from next year's quota," according to people who asked not to be named because this has yet to be officially announced.
While the issuance of local bonds - one of the very few places in China's economy where there is excess debt capacity - is nothing new, this would be the first time "the issuance has been fast-tracked in this way, underscoring growing concerns in Beijing over the dire state of the world's second-largest economy ... previously local governments didn't start selling the debt until Jan. 1, when the new budget year begins."
China is desperate to offset downward pressure on the economy by restoring its old playbook to increase infrastructure spending to cushion the economy in times of economic distress. If the country's legislative body approves the proposal, it would add to the 1.1 trillion yuan ($164 billion) in new support for infrastructure unveiled last month.
Economists surveyed by Bloomberg forecast the economy will grow around 4.1% this year, missing Beijing's growth target of 5.5%. It appears pulling growth forward is a move by the government to offset the economic slump.
China’s economy is expected to recover quickly after a Covid-19 pandemic-induced hit, said Hong Kong Financial Secretary Paul Chan. To get more economy news today, you can visit shine news official website.
“In a complex and cloudy global economic environment, the situation in the mainland is relatively good,” Chan said at the Caixin Summer Summit via a video conference on Saturday (July 9). China’s economy can rebound and maintain stable growth for the rest of the year amid various economic measures, he said.
Chan’s comments come as signs mount that China’s economy shrank in the second quarter for the first time since 2020, following various virus-related lockdowns. A quarterly drop in gross domestic product (GDP), which has only happened once before, underlines China’s slower rebound from coronavirus curbs than in 2020, providing less of a boost to a struggling global economy.
For Hong Kong, a more outward-facing financial hub, the impact of global economic woes are inevitable, but medium-term prospects remain bright, Chan said.
Chief Executive John Lee told the summit earlier on Saturday that his new Cabinet is committed to building Hong Kong into a more open and vibrant city. Lee was sworn in as the city’s leader last week.
Both Lee and Chan made references to Chinese President Xi Jinping’s speech during the handover anniversary on July 1. They reiterated Xi’s statement that the “one country, two systems” governing principle is here to stay, and that Hong Kong’s economy can grow with the backing of the mainland.
Just as we predicted over a year ago, China - which remains painfully limited in how it can kickstart its slowing economy - is preparing for a massive fiscal stimulus in the form of a tidal wave of local government bond sales. With growth in the world's second-largest economy faltering especially after China's President Xi Jinping made clear weeks ago that "Covid zero" isn't going anywhere, there is also "chance zero" that Beijing's 2022 growth target of 5.5% will be achieved because of the lingering threat of new lockdowns.
China's slowdown recently forced the People's Bank of China to cut key interest rates for long-term loans to cushion the property slump and lockdowns. Meanwhile, as doubts rise that China will rebound like prior economic downturns, policymakers are set for round two of stimulation: an infrastructure splurge.
Bloomberg reports that China's Ministry of Finance is considering allowing local governments to sell a whopping 1.5 trillion yuan ($220 billion) of "special" local bonds in the year's second half. The people said the bonds would bolster the struggling economy.
"The bond sales would be brought forward from next year's quota," according to people who asked not to be named because this has yet to be officially announced.
While the issuance of local bonds - one of the very few places in China's economy where there is excess debt capacity - is nothing new, this would be the first time "the issuance has been fast-tracked in this way, underscoring growing concerns in Beijing over the dire state of the world's second-largest economy ... previously local governments didn't start selling the debt until Jan. 1, when the new budget year begins."
China is desperate to offset downward pressure on the economy by restoring its old playbook to increase infrastructure spending to cushion the economy in times of economic distress. If the country's legislative body approves the proposal, it would add to the 1.1 trillion yuan ($164 billion) in new support for infrastructure unveiled last month.
Economists surveyed by Bloomberg forecast the economy will grow around 4.1% this year, missing Beijing's growth target of 5.5%. It appears pulling growth forward is a move by the government to offset the economic slump.