Recent Chinese Incentive Measures cannot impress because investors focus on US trade negotiations

China’s latest impetus to revive growth with broader stimulation measures failed to cheer up its stock market because the concerns over economic deterioration exceeds policy optimism, and investors focus on trade negotiations with the US

The volume of the stimulus package, including the reduction of the interest rate and the serious liquidity injection, attracted some comparisons to Location Policy last September This caused a market promotion by raising the CSI 300 index more than 32% in a six -day victorious series.

However, this time history did not happen again. The index of the landmark almost did not come on the day of the announcement, adding only 0.61%, and grew almost the same Thursday. In two days, Hong Kong Hang Seng acquired less than 0.4%.

According to analysts, markets were largely rated in politics before the briefing, combined with concern about the current trade war.

Governor of the People’s Bank of China, Mr. Gonssheng Wednesday announced To reduce key policy rates by 10 basic points and reduce the amount of cash which banks should contain by 50 basic points. Among a number of measures, the Pan said the Central Bank would set inexpensive funds for the purchase of bonds related to technology, as well as for investment in the care of the elderly and consumption of services.

The stimulus largely complied with the economic priority set out at a meeting at the Politburo last month. It was “not only a stop, not a decision,” said Neo van, heading the Chinese economist and strategist at Evercore ISI.

Last month Politburo, second in China by political body urged local authorities to prepare For “worst scenarios” with sufficient planning, calling for the accelerated implementation of active fiscal and monetary policy. He also outlined plans to support the financing of the technological sector, increase domestic consumption when stabilizing exports.

Without specific tariffs, the Central Government acknowledged that “impact from external shocks” intensified.

Unlike September last year, when the PBOC clearly supported the stock markets and provided direct financing investment and ransom, this routine stimulation round is more oriented to industrial and social needs, said Eugene HSIA, the head of China’s stock strategy at Macquarie Capital.

For a significant action, investors expect more focused financial measures that directly increase consumer moods and more effective plans to support the real estate sector, Hsiao said.

Recent economic data from China signal economic deterioration. Production The Purchase Managers’ Purchase Falling on a 16-month low levelIn April, sliding into the contractile territory, with the new export sensor decreased to the lowest since December 2022. The activity of services in the country also slowed down in April since the previous month.

China intends to release its trade data for April on Friday, which will probably reflect the complete impact of tariffs on its weekend supplies.

In April, a sharp decrease compared to a reliable 12.4%growth in March reduced exports by 2.2%, when in March the narrowing of reliable growth by 12.4%began when the front -line loader loading began to narrow. According to him, the number of container vessels from China to the United States decreased dramatically by April 42.

Concerns are caused by the fact that the fall will go into the job market. Last PMI shown Employment dropped to all organs In April when manufacturers started engaged stop production and put the workers on a paid vacation.

Goldman Sachs suggests that 16 million jobs-2% of the country’s labor force are in the production of goods related to the US.

The recent revocation of the US Rules “De Minimis”, which released low -cost goods, also caused employment worries in China’s labor sectors, in particular in China, in particular, in particular clothes and consumer electronics.

China confirmed on Wednesday that the Deputy Prime Minister he will meet with US Treasury Minister Scott Bales during a visit to Switzerland later this week Ask Washington. Trump disagreed With this characteristic.

The planned meeting will mark the first trade talks between the United States after the tariff escalation this year.

While the achievement of a comprehensive transaction is likely to be difficult and time consuming, a gradual rollback of tariffs on both sides, although analysts are divided into the pace of such de -escalation.

Robin Sing, Chief Economist Morgan Stanley, provides efficient tariffs for Chinese US goods that can be reduced from the current non -term level to a terminal rate by 45% by the end of the year.

However attempts to reach a more complete deal similar to The first transaction phase is signed during Trump’s first termIt will probably be “long and perhaps unproductive,” said Tianchen SU, the senior economist, since both sides showed little appetite for compromise on relevant strategic priorities and economic red lines.

China was unable to fulfill its commitments As part of the first stage, to buy $ 200 billion more in US goods and services for two years, when the COVID-19 pandemic pandemic pandemic pandemic.

For the future tariff meeting with the infant, China “does not believe that this conversation will bring anywhere,” said Wang Dan, Director of China, Director of the Eurosia Group Counseling Company. “Things can deteriorate, so they save a large weapon for later,” she said, hinting at possible stronger measures to support the Chinese economy.