China_ State Council called for faster implementation of easing measures, echoing the Politburopdf
China_ State Council called for faster implementation of easing measures, echoing the Politburopdf
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  1. Bottom line:In today’s (29 September) State Council meeting, policymakers focused on theimplementation of incremental easing measures and reiterated the pledge to “strivefor the full-year growth targets”, echoing President Xi’s call in the SeptemberPolitburo meeting. Specifically, Premier Li Qiang pledged to “accelerate the pace forrolling out and implementing policy easing measures”, required more forcefulcollaboration across different ministries and more synergy between various policymeasures, and vowed to “speed up the progress of 102 key investment projectsunder China’s 14th Five Year Plan”. Meanwhile, PBOC and some large cities alsounveiled some housing easing policies. Under the current bolder easing mode, weexpect more concrete demand-side stimulus measures in coming weeks/months,and will be watching for potential ad hoc meetings by some key ministries (e.g.,MOF, NDRC, MOHURD and MOC), as well as the next National People’s Congressstanding committee meeting (likely during late October — early November). Main points:1. In its regular meeting today (29 September) chaired by Premier Li Qiang, the StateCouncil focused on the implementation of “launching a basket of incremental easingmeasures” (“研究部署一揽子增量政策的落实工作”), and reiterated the pledge to“strive for the full-year growth targets”, echoing President Xi’s call in the SeptemberPolitburo meeting. Specifically, Premier Li pledged to “accelerate the pace for rollingout and implementing policy easing measures”, required more forceful collaborationacross different ministries and more synergy between various policy measures, andvowed to “speed up the progress of 102 key investment projects under China’s 14thFive Year Plan (FYP)”. Note the list of “102 key investment projects” was initiallyunveiled in 2021 for major government-led investment during the 14th FYP(2021-25), and this broadly covers projects related to high-tech manufacturing,transportation, energy, water conservancy, etc. Although there is no officialannouncement on the total planned investment value for these projects and thecurrent progress, according to NDRC head Zheng Shanjie in December 2023, 96 outof the 102 key projects had progress “meeting expectations”, while the constructionprogress of a few others was delayed owing to increased fiscal challenges to somelocal governments and insufficient preparation. 2. Meanwhile, housing easing is also underway. China’s Self-Regulatory PricingMechanism for Market Interest Rates — composed of financial institutions andLisheng Wang+852-3966-4004 |lisheng.wang@gs.comGoldman Sachs (Asia) L.L.C.Hui Shan+852-2978-6634 | hui.shan@gs.comGoldman Sachs (Asia) L.L.C.Xinquan Chen+852-2978-2418 |xinquan.chen@gs.comGoldman Sachs (Asia) L.L.C.Yuting Yang+852-2978-7283 |yuting.y.yang@gs.comGoldman Sachs (Asia) L.L.C.Andrew Tilton+852-2978-1802 | andrew.tilton@gs.comGoldman Sachs (Asia) L.L.C.China: State Council called for faster implementation of easingmeasures, echoing the Politburo30 September 2024 | 1:27AM HKTInvestors should consider this report as only a single factor in making their investment decision. For Reg ACcertification and other important disclosures, see the Disclosure Appendix, or go towww.gs.com/research/hedge.html.
  2. overseen by the PBOC — suggested all banks to cut the interest rates of existingmortgages to no lower than 30bp below loan prime rate (LPR) by 31 October, echoingPBOC Governor Pan’s earlier pledge to cut existing mortgage rates by an average of50bp. PBOC and National Financial Regulatory Administration (NFRA) announced toextend the policy support to facilitate the extensions of property developer loans andtrust loans to 31 December 2026. Moreover, following PBOC’s recent guidelines,Shanghai, Guangzhou and Shenzhen also rolled out local housing easing measures,including reductions to downpayment ratios and easing restrictions for home purchases.Under the current bolder easing mode, we expect more concrete demand-side stimulusmeasures in coming weeks/months, and will be watching for potential ad hoc meetingsby some key ministries — e.g., Ministry of Finance (MOF), National Development andReform Commission (NDRC), Ministry of Housing and Urban-Rural Development(MOHURD) and Ministry of Commerce (MOC) — as well as the next National People’sCongress (NPC) standing committee meeting (likely during late October — earlyNovember). 30 September 20242Goldman SachsChina
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