Shanghai Composite Index data from publicly available financial sources like Bloomberg or Reuters

China Unveils Major Stimulus Package, Cuts $5.3 Trillion in Mortgage Rates by 50 Basis Points

Sep 30, 2024, 01:13 AM

China has introduced a comprehensive economic stimulus package aimed at revitalizing its slowing economy. The measures include broad monetary stimulus, property market support, and fiscal measures expected to be rolled out soon. The People's Bank of China has cut interest rates on one-year loans and eased rules on second home purchases. Major cities like Shanghai, Guangzhou, and Shenzhen have lifted home purchase restrictions. Additionally, mortgage rates on $5.3 trillion in loans will be reduced by 50 basis points by the end of October. These actions have resulted in a significant rebound in the stock market, with the Shanghai Composite Index rising over 5% and the CSI 300 Index gaining 22% from its September low. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, surged over 10%. According to Goldman Sachs, China's leadership reached its 'pain threshold' before implementing these measures. Analysts are cautiously optimistic about the long-term impact of these measures on economic growth and consumer confidence. Chinese stocks posted their best week in 16 years, with the biggest weekly rise in 15 years.