<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108040874-1727707108673-gettyimages-2173990659-cfoto-chinasto240927_np79X-820x461.jpeg" alt="" class="wp-image-537077" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108040874-1727707108673-gettyimages-2173990659-cfoto-chinasto240927_np79X-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108040874-1727707108673-gettyimages-2173990659-cfoto-chinasto240927_np79X-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108040874-1727707108673-gettyimages-2173990659-cfoto-chinasto240927_np79X-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108040874-1727707108673-gettyimages-2173990659-cfoto-chinasto240927_np79X-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108040874-1727707108673-gettyimages-2173990659-cfoto-chinasto240927_np79X-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108040874-1727707108673-gettyimages-2173990659-cfoto-chinasto240927_np79X.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A customer watches stock market at a stock exchange in Hangzhou, China, on September 27, 2024.  Costfoto | Nurphoto | Getty Images</figcaption></figure>



BEIJING — The rocket higher in Chinese stocks so far looks different from the market bubble in 2015, analysts said.



Major mainland China stock indexes surged by more than 8% Monday, extending a winning streak on the back of stimulus hopes. Trading volume on the Shanghai and Shenzhen stock exchanges hit 2.59 trillion yuan ($368.78 billion), surpassing a high of 2.37 trillion yuan on May 28, 2015, according to Wind Information.



Over six months from 2014 to 2015, the Chinese stock market doubled in value, while leverage climbed, Aaron Costello, regional head for Asia at Cambridge Associates, pointed out Monday.



This time around, the market hasn’t run up as much, while leverage is lower, he said. “We’re not in the danger zone yet.”



Stock market leverage by percentage and value were far higher in 2015 than data for Monday showed, according to Wind Information.



The Shanghai Composite in June 2015 soared past 5,100 points, a level it has never regained since a market plunge later that summer. MSCI that year delayed adding the mainland Chinese stocks to its globally tracked emerging markets index. Also hitting sentiment was Beijing’s back-and-forth on a crackdown on trading with borrowed funds and a surprise devaluation of the Chinese yuan against the U.S. dollar.



This year, the yuan is trading stronger against the greenback, while foreign institutional allocation to Chinese stocks has fallen to multi-year lows.



The Shanghai Composite closed at 3,336.5 on Monday, before mainland exchanges closed for a week-long holiday commemorating the 75th anniversary of the People’s Republic of China. Trading is set to resume on Oct. 8.



In the runup to the 2015 market rally, Chinese state media had encouraged stock market investment, while loose rules allowed people to buy stocks with borrowed funds. Beijing has long sought to build up its domestic stock market, which at roughly 30 years old is far younger than that of the U.S.



<h2 class="wp-block-heading" id="h-strong-policy-signals"><a></a>Strong policy signals</h2>



The latest market gains follow announcements in the last week of economic support and programs to encourage institutions to put more money into stocks. The news helped stocks rebound from roughly their lowest levels of the year. The CSI 300 rallied by nearly 16% in its best week since 2008.



Chinese President Xi Jinping on Thursday led a high-level meeting that called for halting the real estate market’s decline as well as strengthening fiscal and monetary policy. The People’s Bank of China last week also cut interest rates and the amount existing mortgage holders need to pay.



“The policy is much stronger and [more] concerted this time than 2015. That said, the economy faces greater headwind[s] right now compared to back then,” said Zhu Ning, author of “China’s Guaranteed Bubble.”



One week of massive stock gains do not mean the economy is on its way to a similar recovery.



The CSI 300 remains more than 30% below its February 2021 high, a level that had even surpassed the index’s 2015 high.



“The Japanese experience provides an important perspective, as the Nikkei 225 Index bounced four times by an average of 34 per cent on its way to a 66 per cent cumulative drop from December 1989 to September 1998,” Stephen Roach, senior fellow at Yale Law School’s Paul Tsai China Center, pointed out Tuesday in a blog post that was also published in the Financial Times opinion section.



Economic data for the last few months have pointed to slower growth in retail sales and manufacturing. That raised concerns that China’s gross domestic product would not reach the full-year target of around 5% without additional stimulus.



“I think what’s missing is the key to a lot of this, that has not come out, which would be a truly confidence-boosting measure, is how are they going to fix the local government finances,” Costello said, noting local coffers once relied on land sales for revenue to spend on public services.



While Chinese authorities have cut interest rates and eased some home buying restrictions, the Ministry of Finance has yet to announce additional debt issuance to support growth.



<h2 class="wp-block-heading" id="h-animal-spirits-at-play"><a></a>Animal spirits at play</h2>



Peter Alexander, founder and managing director of Z-Ben Advisors, expects the level of fiscal stimulus — when it’s likely announced in late October — to be less than what markets are hoping for.



It “may have investors a little bit over their skis, as people like to say,” he said Monday on CNBC’s “Street Signs Asia.”



He added in a written response that his experiences in 2007 and 2015 indicate the Chinese stock market rally could last for another three to six months, or abruptly end.



“This is pure animal instincts and the Chinese have been pent up for a stock market rally,” Alexander said. He added that there are market risks from how unprepared the stock trading system was for the surge of buying.



Data on the number of new retail investors in China this year wasn’t publicly available. Reports indicate brokerages have been overwhelmed with new requests, echoing how individuals piled into the stock market nearly a decade earlier. The Shanghai Stock Exchange on Friday said confirming transactions at the market open had been abnormally slow.



<h2 class="wp-block-heading" id="h-looking-for-earnings-growth"><a></a>Looking for earnings growth</h2>



“China was cheap and was missing the catalyst. &#8230; The catalyst has occurred to unlock the value,” Costello said.



“Fundamentally we need to see corporate earnings go up,” he said. “If that doesn’t go up, this is all a short-term pop.”



Beijing’s efforts earlier this year to stem a market rout included changing the head of the securities regulator. Stocks climbed, only to see the rally peter out in May.



A factor that can send stocks past May levels is that earnings per share forecasts have stabilized versus downgrades earlier this year, James Wang, head of China strategy at UBS Investment Bank Research, said in a note Monday.



Lower U.S. interest rates, a stronger Chinese yuan, increased share buybacks and more coordinated policymaker response also support gains, he said. Wang’s latest price target of $70 on the MSCI China index is now just a few cents above where it closed Monday.



— CNBC’s Hui Jie Lim contributed to this report.

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China’s stock surge has echoes of the 2015 bubble. What’s different this time

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108041186-1727745894541-gettyimages-2175709455-port532972_nnwur8co-820x461.jpeg" alt="" class="wp-image-537041" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108041186-1727745894541-gettyimages-2175709455-port532972_nnwur8co-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108041186-1727745894541-gettyimages-2175709455-port532972_nnwur8co-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108041186-1727745894541-gettyimages-2175709455-port532972_nnwur8co-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108041186-1727745894541-gettyimages-2175709455-port532972_nnwur8co-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108041186-1727745894541-gettyimages-2175709455-port532972_nnwur8co-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108041186-1727745894541-gettyimages-2175709455-port532972_nnwur8co.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Shipping containers sit stacked in the Port of Newark on September 30, 2024 seen from New York City. A massive strike shutting down ports across the East and Gulf coasts began at midnight as members of the International Longshoremen’s Association continue to make salary and other demands to the United States Maritime Alliance, which controls many of the ports across the country.  Spencer Platt | Getty Images News | Getty Images</figcaption></figure>



Billions in trade came to a screeching halt at U.S. East Coast and Gulf Coast ports after members of the International Longshoremen’s Association (ILA) began walking off the job after 12:01 a.m. ET on October 1. The ILA is North America’s largest longshoremen’s union, with roughly 50,000 of its 85,000 members making good on the threat to strike at 14 major ports subject to a just-expired master contract with the United States Maritime Alliance (USMX), and picketing workers beginning to appear at ports. The union and port ownership group failed to reach agreement by midnight on a new contract in a protracted battle over wage increases and use of automation.



In a last-ditch effort on Monday to avert a strike that will cause significant harm to the U.S. economy if it is lengthy — at least hundreds of millions of dollars a day at the largest ports like New York/New Jersey — the USMX offered a nearly 50% wage hike over six years, but that was rejected by the ILA, according to a source close to the negotiations. The port ownership group said it hoped the offer would lead to a resumption of collective bargaining.



The 14 ports where preparations for a strike have been underway are Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, New Orleans, Mobile, and Houston.



New York Governor Kathy Hochul said in a statement issued shortly after midnight that “the first large-scale eastern dockworker strike in 47 years began at ports from Maine to Texas, including at the Port Authority of New York and New Jersey. In preparation for this moment, New York has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need.”



Rhetoric from ILA leadership has been aggressive in the weeks leading up to the strike, with ILA president Harold Daggett, who was a union member the last time it went out on strike in 1977, telling rank-and-file members — who unanimously voted to authorize a strike — in a recent video message, “We’ll crush them.” 



In a video posted to an ILA Instagram account, Daggett addressed union workers at Maher Terminals in Elizabeth, New Jersey. “This is going down in history, what we’re doing here,” he said. “They can’t survive too long,” he added.



For now, it is the supply chain and U.S. economy which will take the immediate hit.



Shana Wray, principal solutions architect for supply chain intelligence firm FourKites, tells CNBC the strike comes at the worst possible time, with its impact on supply chain congestion to exacerbate the devastation left behind from Hurricane Helene.



“Helene caused ports to delay openings at the ports of Charleston and Savannah, as well as power losses at intermodal facilities in Savannah, Charleston, and Atlanta,” said Wray. “This created ocean, trucking, and rail carriers congestion across Southeast and Gulf ports.”



Logistics experts have told CNBC in recent months there has been an exodus of cargo from the East to West Coast, and companies moved up orders for peak shipping season due to the strike risk. Both economists and logistics executives say the impact of the strike depends on how long the work stoppage lasts.



“A disruption of a week or two will create some backlogs but the broader consequences will be minimal outside of a handful of very port-reliant areas, including Savannah,” said Adam Kamins, economist at Moody’s Analytics. “But anything longer will lead to shortages and upward price pressures,” he said.



The most significant issues would be faced by food and automobile industries, Kamins said, as they rely especially heavily on the ports that will be shut down. While a surge in inflation is highly unlikely even with a longer strike, even a modest reacceleration could create uncertainty and force the Federal Reserve to be more cautious about lowering interest rates, which would weigh on the overall outlook for job growth and investment.



A one-week strike could cost the U.S. economy $3.78 billion, according to an analysis by The Conference Board, and cause supply chain slowdowns through mid-November. In all, the ports threatened with strikes handle $3 trillion annually in U.S. annual international trade.



Many industries are preparing for major repercussions. Noushin Shamsili, CEO and president of Nuco Logistics, which specializes in pharmaceutical imports and exports, said the strike comes at a critical time for inventory replenishment for the pharma sector.



“Almost all of this industry is just on time,” said Shamsili. “Raw materials are being brought in to complete drug manufacturing. Medical supplies for clinics and hospitals are on these vessels. For a while importers did not bring in a lot of cargo because they were overflowing with supplies post-Covid. Now they have started reordering medical devices, gloves, syringes, and tubing.”



Shamsili also said the East Coast ports are a gateway for generic medicine made in India. Approximately 48% of the active pharmaceutical ingredients used in the U.S. are being imported from India. Without these APIs, medications cannot be produced. APIs are also manufactured in Europe, which also use the East Coast ports as U.S. points of entry.



Steve Lamar, CEO of the American Apparel and Footwear Association, said these ports are critical for the retailing industry. In 2023, the East and Gulf Coast ports accounted for 53% of all U.S. apparel, footwear, and accessories imports, he said, amounting to over&nbsp;$92 billion&nbsp;in value.



“The clock is ticking away,” said Lamar. “Each strike day yields five more days of disruption as our consumer-driven economy gets snarled in port backlogs right as we hit the heavy holiday shopping season. Both sides need to get back to the table and the administration must be ready to use all of its tools to make sure this happens. Reaching a fair, long-term, and sustainable deal is job No. 1 for all parties.”



Importers such as Walmart — the No. 1 importer across the affected ports — as well as other top importers including Home Depot, Ikea, Samsung, and LG Electronics will find few to no options to divert trade to Canada or the West Coast as other unions close ranks in support of the ILA’s labor battle.



These companies are among the leading importers at the 14 major ports that an ILA strike would impact, according to ImportGenius data.



The last time the ILA went on strike in 1977 the ILWU union at West Coast ports supported it by allowing ILA members to go to the Port of Los Angeles to stop the unloading of diverted vessel. ILA president Daggett, who was involved in those actions as a young union member, recently cited this historical example in communications with the rank-and-file.



The ILA has also made clear that all of its members, including those not subject to the expired contract, will be closing ranks. “You can be sure the ILA’s 85,000 members will be supporting their Sisters and Brothers,” James McNamara, spokesman for the ILU, recently told CNBC.



The Teamsters issued a statement on Monday night from its president Sean O’Brien saying it stood “100%” with the ILA in the fight for a new contract and reminding its members that Teamsters do not cross picket lines. “The ocean carriers are on strike against themselves after failing to negotiate a contract that recognizes the value of these workers,” O’Brien stated, and he added some harsh words about any effort by the federal government to interfere in the labor action.



The National Retail Federation has said items on the vessels en route for October 1 arrival and after are restocking items for the holidays as well as just-in-time products like auto parts and pharmaceuticals.



Between 43%-49% of all U.S. imports and billions of dollars in trade monthly are now caught up in the failed talks over a new union contract, which broke down in June amid allegations from the ILA that ports were violating rules related to use of automation.



The White House has engaged senior officials including Secretary of Transportation Pete Buttigieg, Acting Secretary of Labor Julie Su, and Director of the National Economic Council Lael Brainard since late last week in an effort to bring the ILA and USMX back to the bargaining table to negotiate a deal quickly.



Late in the day on Monday, USMX put out a statement saying within the past 24 hours it had traded counter offers with the union, including an offer to increase wages by nearly 50% over six years, triple employer contributions to employee retirement plans, strengthen health care options, and retain the current contract language around automation and semi-automation.



The union had already said in statement issued at 11 a.m. ET on Monday that “the Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject.” The statement added that the union saw the USMX as “intent on causing a strike at all ports from Maine to Texas beginning in almost 12 hours.”



The Biden administration finds itself in a delicate political moment, with the presidential election one month away and President Biden vowing he will not use existing labor law to force union workers back on the job, which is within his powers under the Taft-Hartley Act.



The Taft-Hartley Act, passed in 1947, was a revision of U.S. law governing labor relations and union activity that granted a U.S. president the power to suspend a strike for an 80-day “cooling off period” in cases where “national health or safety” are at risk.&nbsp;



The White House has reiterated its position several times in recent days that “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now.”



Cruise operations and military operations at ports will continue.

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East and Gulf Coast ports strike, stranding billions in trade and threatening U.S. economy

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-820x462.webp" alt="" class="wp-image-536800" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-820x462.webp 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-300x169.webp 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-160x90.webp 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-768x432.webp 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY.webp 1480w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Bitcoin. Nurphoto | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=/">Bitcoin</a>&nbsp;and crypto stocks retreated on the final trading day of September, following a rally last week, but are still poised to post a positive month.



The flagship cryptocurrency was last lower by 3.5% at $63,612.63, after briefly reclaiming the $65,000 level last week, according to Coin Metrics. Crypto stocks such as&nbsp;<a href="https://www.cnbc.com/quotes/COIN/">Coinbase</a>&nbsp;fell 3% in premarket trading and&nbsp;<a href="https://www.cnbc.com/quotes/MSTR/">MicroStrategy</a>&nbsp;slid 5%.



Investors are <a href="https://www.cnbc.com/2024/09/30/ports-strike-truckers-rails-billions-in-cargo-shutdown.html">bracing for strikes at ports</a> up and down the East Coast and along the Gulf Coast after midnight Monday, which could shake the economy ahead of the holiday season. 



Analysts have also warned about overbought conditions as bitcoin last week climbed nearly 5% in the five days ending Sept. 27 – as net inflows into global crypto exchange traded products accelerated to their highest level since mid-July. In the same period, Coinbase and MicroStrategy gained 12% and 21%, respectively. On Friday both stocks jumped 6%.



The combined net buying volume of U.S. bitcoin ETFs last week (16,774 BTC) exceeded a typical one-month supply of newly mined bitcoin (13,500), according to Bitwise-owned ETC Group. This was largely due to the&nbsp;<a href="https://www.cnbc.com/2024/09/24/chinas-central-bank-chief-set-to-hold-press-conference-days-after-fed-rate-cut.html">policy reversal</a>&nbsp;by the People’s Bank of China, the firm said.



For the month, bitcoin is on pace to finish its strongest September ever with an 8% gain and its second positive September – historically the cryptocurrency’s weakest month – in a row.



Coinbase is poised for a 4% monthly gain but is down nearly 14% for the quarter. Some analysts&nbsp;<a href="https://www.cnbc.com/2024/09/25/analysts-warn-coinbase-could-slump-after-six-day-rally-.html">see that downtrend continuing</a>&nbsp;in the coming weeks. Meanwhile, MicroStrategy is up 33% for the month and almost 28% for the quarter.



The market is heading into a seasonally strong quarter for crypto and risk assets broadly.



Bitcoin’s narrative is often debated — whether it’s a store of value or a risk asset — but its correlation is currently closer to that of the S&amp;P 500 than to gold, and investors expect it to benefit from rate cuts, clarity following the U.S. presidential election and seasonal and favorable market conditions translating into greater flows into crypto ETFs.

107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107334836-17001387862023-11-16t045757z_657805151_rc24e4ay49fs_rtrmadp_0_apec-usa-820x461.jpeg" alt="" class="wp-image-535493" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107334836-17001387862023-11-16t045757z_657805151_rc24e4ay49fs_rtrmadp_0_apec-usa-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107334836-17001387862023-11-16t045757z_657805151_rc24e4ay49fs_rtrmadp_0_apec-usa-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107334836-17001387862023-11-16t045757z_657805151_rc24e4ay49fs_rtrmadp_0_apec-usa-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107334836-17001387862023-11-16t045757z_657805151_rc24e4ay49fs_rtrmadp_0_apec-usa-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107334836-17001387862023-11-16t045757z_657805151_rc24e4ay49fs_rtrmadp_0_apec-usa-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107334836-17001387862023-11-16t045757z_657805151_rc24e4ay49fs_rtrmadp_0_apec-usa.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



BEIJING — China aims to stop the property slump, top leaders said Thursday in a readout of a high-level meeting published by state media.



Authorities “must work to halt the real estate market decline and spur a stable recovery,” the readout said in Chinese, translated by CNBC. It also called for “responding to concerns of the masses.”



Chinese President Xi Jinping led Thursday’s meeting of the Politburo, the second-highest circle of power in the ruling Chinese Communist Party, state media said.



The readout said leaders called for strengthening fiscal and monetary policy support, and touched on a swath of issues from employment to the aging population. It did not specify the timeframe or scale of any measures.



“I take the messages from this meeting as a positive step,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in an email to CNBC. “It takes time to formulate a comprehensive fiscal package to address the economic challenges, [and] the meeting took one step in that direction.”



Stocks in mainland China and Hong Kong extended gains after the news to close sharply higher on Thursday. An index of Chinese property stocks in Hong Kong surged by nearly 12%.



Real estate once accounted for more than a quarter of China’s economy. The sector has slumped since Beijing’s crackdown in 2020 on developers’ high levels of debt. But the decline has also cut into local government revenue and household wealth.



China’s broader economic growth has slowed, raising concerns about whether it can reach the full-year GDP target of around 5% without additional stimulus. Just days after the U.S. cut interest rates, the People’s Bank of China on Tuesday announced a slew of planned interest rate cuts and real estate support. Stocks rose, but analysts cautioned the economy still needed fiscal support.



Official data shows real estate’s decline has moderated slightly in recent months. The value of new homes sold fell by 23.6% for the year through August, slightly better than the 24.3% drop year-to-date as of July.



Average home prices fell by 6.8% in August from the prior month on a seasonally adjusted basis, according to Goldman Sachs. That was a modest improvement from a 7.6% decline in July.



“Bottom-out stabilization in the housing market will be a prerequisite for households to take action and break the ‘wait-and-see’ cycle,” Yue Su, principal economist China, at the Economist Intelligence Unit, said in a note. “This suggests that the policy priority is not to boost housing prices to create a wealth effect, but to encourage households to make purchases. This real estate policy is aiming at reducing its drag on the economy.”



Thursday’s meeting called for limiting growth in housing supply, increasing loans for whitelisted projects and reducing the interest on existing mortgages. The People’s Bank of China on Tuesday said forthcoming cuts should lower the mortgage payment burden by 150 billion yuan ($21.37 billion) a year.



While Thursday’s meeting did not provide many details, it is significant for a country where policy directives are increasingly determined at the very top.



The high-level meeting reflects the setting of an “overall policy,” as there previously wasn’t a single meeting to sum up the measures, Bank of China’s chief researcher Zong Liang said in Mandarin, translated by CNBC.



He noted how the meeting follows the market’s positive response to the policy announcements earlier in the week. Zong expects Beijing to increase support, noting a shift from focus on stability to taking action.



<h2 class="wp-block-heading" id="h-tempering-growth-expectations"><a></a>Tempering growth expectations</h2>



The meeting readout said China would “work hard to complete” the country’s full-year economic targets.



That’s less aggressive than the Politburo meeting in July, when the readout said China would work to achieve those goals “at all costs,” according to Bruce Pang, chief economist and head of research for Greater China at JLL.



That shows policymakers are looking for middle ground between short-term growth and longer-term efforts to address structural issues, he said.



Goldman Sachs and other firms have trimmed their growth forecasts in the last few weeks.



The change in tone about the economic targets signals “the government may tolerate growth below 5%,” the EIU’s Su said. “We estimate real economic growth to be around 4.7% in 2024, before slowing down to 4.5% (a moderate upward revision to our previous forecast).”



“The Politburo meetings on economic deployment usually take place in April, July, and October,” she said.



“The fact that this meeting was held earlier, along with the emphasis on stabilizing growth, reflects policymakers’ concerns about the current economic growth trend.”



Initial analyst reactions to Thursday’s meeting readout were varied.



HSBC said “the tide has turned; be prepared for more proactive initiatives.” Capital Economics, on the other hand, said Beijing’s hint at stimulus did not make it clear whether it would include large-scale fiscal support.



S&amp;P Global Ratings analysts said in a report earlier this year that fiscal stimulus is losing its effectiveness in China and is more of a strategy to buy time for longer-term goals.



Senior officials in the summer told reporters that the economy needed to endure necessary “pain” as it transitioned to one of higher-quality growth with a bigger high-tech industry.



— CNBC’s Sonia Heng contributed to this report.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/101943216-980643681-820x461.jpg" alt="" class="wp-image-535129" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/101943216-980643681-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/101943216-980643681-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/101943216-980643681-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/101943216-980643681-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/101943216-980643681-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/101943216-980643681.jpg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">AFP | Getty Images</figcaption></figure>



China’s government announced it will offer a one-time cash allowance to those in extreme poverty, a day after its central bank rolled out a slate of stimulus measures aimed at shoring up the economy.



The handout will be provided to “extremely poor people, orphans and other needy people on the occasion of the 75th anniversary of the founding of New China,” China’s Ministry of Civil Affairs reported on Wednesday. That’s according to a Google translation. The subsidies will be doled out before China’s National Day on Oct. 1 to “promptly convey the Party and government’s care and concern for the needy.” The report did not specify the size of the allowance or any further details.



“Xi Jinping and the CPC are laser focused on giving a hand to low- and middle-income Chinese through his common prosperity drive … Xi is focused on building equity in poorer regions,” founder of China Market Research Group Shaun Rein told CNBC when asked about the living subsidies.&nbsp;&nbsp;



The concept of common prosperity, initially introduced by Mao Zedong in the 1950s, was reintroduced by the Chinese government in 2021 to promote moderate wealth for everyone.



As of last November, 40.4 million people in China were covered by subsistence allowances. The average allowance was about 779 yuan ($110.80) per person a month for those staying in urban areas, while rural subsistence was 615 yuan per person.



On Tuesday, China’s vice minister of human resources and social security claimed the country has established the world’s largest social security network. He said the number of people enrolled in basic old-age insurance, unemployment insurance and work-related injury insurance has reached 1.07 billion, 245 million, and 301 million, respectively.



While Chinese President Xi Jinping is a proponent of common prosperity, deploying one-time handouts within such a short time frame is still uncommon.&nbsp;



Even during the Covid pandemic, China did not give out cash subsidies to households and enterprises unlike other governments such as the U.S. and Europe, key member of the Chinese central bank Huang Yiping noted in an August article. 



China’s economy has been pummeled by a raft of weak economic data, as more Chinese opt to save rather than spend leading to lackluster consumption and retail sales figures.

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