Kevin Frayer
China’s Politburo said the nation’s “fiscal policy must be moderately strengthened” as it seeks to recover from three three years of COVID-19 prevention and control, it said in a statement on Friday.
The Political Bureau of the Central Committee of the Communist Party also stated that “prudent monetary policy must be flexible, precise, and effective.”
China’s economy has been struggling since the government lifted most of its COVID restrictions in January and all restrictions on travel to the country in August. Its official NBS Manufacturing PMI edged down in November to 49.4 from 49.5 in October, missing market forecasts of 49.7. Industrial profits in the first 10 months of the year dropped by 7.8% Y/Y, slowing from a 9% slump in the previous period.
“Efforts should be made to expand domestic demand and form a virtuous cycle in which consumption and investment promote each other,” the Politburo said. “It is necessary to deepen reforms in key areas and continue to inject strong impetus into high-quality development.”
The body emphasized the need to “consolidate the fundamentals of foreign trade and foreign investment,” as well as “resolve risks in key areas.”
Environmental concerns were also addressed, with the bureau saying the country needs to promote “green and low-carbon development.”
The statement said the country continues to need the leadership of Xi Jinping to attain its goals.
The Chinese yuan slipped 0.1% against the U.S. dollar, and the iShares MSCI China ETF (NASDAQ:MCHI) slipped 0.4% in Friday U.S. premarket trading. Direxion Daily FTSE China Bull 3X Shares ETF (NYSEARCA:YINN) dropped 1.1%. Direxion Daily FTSE Bear 3X Shares ETF (NYSEARCA:YANG) gained 1.2%.
Other relevant ETFs: SPDR S&P China ETF (NYSEARCA:GXC), iShares China Large-Cap ETF (GXC), and KraneShares CSI China Internet ETF (NYSEARCA:KWEB).
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