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China to hash out stimulus plan with US elections in its sights

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China’s top lawmakers gather Monday to hash out a major stimulus package that analysts say could grow even bigger if former US president Donald Trump wins the White House this week.

Beijing has in recent months heeded calls to step up support for the economy after years of inaction, announcing a raft of measures including rate cuts and the easing of some home buying restrictions.

But they have refrained from unveiling a figure for the long-awaited stimulus, disappointing investors after a market rally fizzled when officials repeatedly failed to commit to a top line.

Analysts now hope this number could emerge from this week’s meeting of the Standing Committee of National People’s Congress, the top body of China’s rubber stamp parliament and headed by number three official Zhao Leji.

The standing committee reviews and approves all legislation, including allocating funds out of China’s budget.

“We are expecting more details on the proposals to be passed,” said Heron Lim of Moody’s Analytics, including “how this extra funding would be allocated to address the near-term economic issues”.

Nomura economists expect lawmakers this week to approve around a trillion yuan ($140 billion) in extra budget — mostly for indebted local governments.

Analysts also expect Beijing to approve a one-off one trillion yuan for banks, aimed at writing off non-performing loans over the past four years.

“A lot of money will go to cover losses,” added Natixis’ Alicia Garcia Herrero.

“It’s not really a growth push.”

Concrete measures are expected to be announced when the meeting wraps up on Friday — in time for Beijing to take stock of results of presidential elections in the United States.

“We believe the US election results will have some impact on the size of Beijing’s stimulus package,” said Ting Lu, Nomura’s Chief China Economist, in a research note.

Both candidates in the race have pledged to get tougher on Beijing, with Trump promising tariffs of 60 percent on all Chinese goods coming into the country.

‘Major challenges’

Nomura economists expect Beijing to adjust the size of its stimulus depending on the outcome.

“In our view, the size of China’s fiscal stimulus package would be around 10 to 20 percent bigger under a Trump win than under the scenario of a (Kamala) Harris win,” Lu wrote.

But he said that “the major challenges for Beijing emanate from within rather than outside”.

China is battling sluggish domestic consumption, a persistent crisis in the property sector and soaring government debt — all of which threaten Beijing’s official growth target of five percent for this year.

The property sector was long a key driver of growth, but is now mired in a sea of debt.

Average prices of new residential property ticked up slightly last month, according to a survey of 100 cities by independent researcher China Index Academy.

But China’s cities and provinces are still on the hook for a trove of unfinished and unsold housing units, and repurchasing them could cost Beijing up to 3.3 trillion yuan, according to Natixis estimates.

Prolonged housing woes continue to lead to weak consumer consumption, according to Lim of Moody’s Analytics.

“The average Chinese consumer with existing mortgages does not feel their wealth is increasing,” he said.

The issue of how local governments manage debt is also set to come under scrutiny at the NPC meeting this week.

Authorities at and above the county level will be required to report their debt situation to the NPC each year, Huang Haihua, spokesman for the NPC standing committee’s legislative affairs commission, said at a briefing Friday.

But China’s economic woes run deeper than local mismanagement and empty homes.

“The overall economy is losing productivity out of basically misallocated savings,” said Garcia Herrero, referring to issues within China’s industrial policy spending, including extensive subsidies.

“They need to really change all of that,” she said.

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Politics

Dr Fabian Ihekweme, a critic to Governor Hope UZODINMA was abducted by policemen yesterday in front of his wife and children in their Abuja home and taken to Owerri.

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November 28, 2024

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Dr Fabian Ihekweme, a critic was abducted by policemen yesterday in front of his wife and children in their Abuja home and taken to Owerri. His crime: criticizing Hope Uzodinma, Imo state governor.
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Suspected gunmen have reportedly abducted Fabian Ihekweme, the former commissioner for foreign affairs in Imo state.

In a viral video seen by TheCable, a woman who identified as Ihekweme’s wife pleaded for the release of her husband.

She added that the incident occurred on Wednesday afternoon at their residence.

“They first took my husband’s driver to my house and gave him the phone to call my husband, and when he came out, they picked him up,” the woman said.

“I do not know why they are trailing me; I don’t have any business with Imo politics; I don’t know why they are trailing my children.

“I don’t know where my husband is. They are still holding him now; Ndi Imo, please help me.”

Ihekweme, who served as a commissioner between 2020 and 2022 under the Hope Uzodimma-led administration, later defected to the Peoples Democratic Party (PDP).

In October, the former commissioner alleged that the governor refused to appreciate his efforts towards his reelection, despite all he did for him.

Henry Okoye, the Imo police spokesperson, told TheCable that the command had not been briefed about the abduction.

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Obasanjo Sends Strong Message To Those who Wish Him Dead

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November 28, 2024

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Obasanjo Sends Strong Message To Those who Wish Him Dead
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Ekwutosblog has gathered that Former President Olusegun Obasanjo has debunked his death rumours making the rounds on social media, saying he’s alive.

The ex-president, who wondered why some people would wish him such, said he quickly informed his family members that he’s hale and hearty.

Obasanjo stated this on Tuesday during the inauguration of the Old Garage/Oke Fia-Lameco Dual carriageway in Osogbo, Osun State, one of the projects being inaugurated to commemorate the second anniversary of Governor Ademola Adeleke.

“I heard the rumour that I was dead. I saw it on the social media. I quickly told my children and my relations that it was not true and that I was alive. Those who want me dead, that is their wish but God still keeps me alive.

“Why would anyone wish me dead? Those who harbour such thoughts will not escape tragedy themselves.

“This kind of rumour is not only disturbing but shows the extent to which some people misuse technology. It is unacceptable,” Obasanjo stated.

Speaking at the event, the governor, Adeleke stated, that his government is committed to the state’s infrastructure development and provision.

“My dear people of Osun State, our administration has constructed over 120 kilometres of roads across the state. Two major flyovers are also progressing to completion at Osogbo while works are progressing at the Ile-Ife flyover and Ilesa dualisation.

“I have redirected our efforts and plan at the completion of Iwo-Osogbo Road. We have added the dualisation of Odoori-Adeeke Road inside Iwo to be executed in two phases. The first phase will reach the Post Office and the Oluwo Palace, while the second phase will take off from the Post Office to Adeeke Junction.

“I want our people to note for the record that for all our projects and programmes, we did not obtain any loan. We only block leakages in the state’s finances and employ local content to moderate project costs and enforce high stand

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House Approves 2025-2027 MTEF

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12 hours ago

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November 27, 2024

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House Approves 2025-2027 MTEF
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The House of Representatives has passed the Medium Term Expenditure Framework and Fiscal Strategy Paper for 2025 to 2027 as submitted by President Bola Tinubu.

This followed the consideration and approval of the recommendations of the Joint Committee on Finance and National Planning which laid its report at Wednesday’s plenary.

The House adopted the projected oil benchmark prices pegged at 75 dollars per barrel for 2025, as well as 76.2 dollars and 75.3 dollars per barrel for 2026 and 2027.

Domestic Crude Oil Production Projections for 2025 is put at 2.06 million barrels per day representing a significant increase from 1.78 million barrels per day in the current year.

GDP growth rate is projected at 4.6, 4.4 and 5.5 percent for 2025 to 2027, respectively, while the projected exchange rate is pegged at 1,400 Naira to the US Dollar for years 2025, 2026 and 2027

The MTEF projections aim towards a realistic and sustainable foundation for Nigeria’s budget planning over the next three years.

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