Analysts warn more detail needed on new China economic measures

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6 months ago

October 13, 2024

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Analysts gave a cautious welcome to China’s announcement Saturday of fresh fiscal stimulus to revive its ailing economy but warned that more details — and specific headline figures — were needed before its effect could be fully assessed.

At a highly anticipated news conference, Beijing said it would issue special bonds to boost the capital available to banks, as well as allow local governments to borrow more.

The moves add to a series of measures unveiled in recent weeks that have included interest rate cuts and liquidity injections for banks, all aimed at kick-starting China’s dragging economy.

Leaders said recently that the government’s official growth target for this year of about five percent was within reach.

But economists have warned that a robust fiscal stimulus programme is necessary in order to boost domestic spending and achieve the full post-pandemic recovery that has so far eluded policymakers.

‘Devil in details’

“The surprise today is that there is no specific number,” Heron Lim of Moody’s Analytics told AFP after the Saturday press conference, saying it looked like the government was “still working on the minute details of the fiscal stimulus”.

“Unfortunately for China, the devil is in the details. It would be preferable that they do have some headline numbers for people to chew on,” he added.

“In the meantime, investors might be taking a step back until they are absolutely certain of the direction fiscal support is taking.”

Although Saturday’s news conference did not unveil a “bazooka” stimulus package, which investors have been clamouring for, comments by officials on expanding central support for the economy received some praise.

Finance Minister Lan Fo’an said the government was “accelerating the use of additional treasury bonds, and ultra-long-term special treasury bonds are also being issued for use”.

The debt ceiling of local governments would also be increased, in theory empowering them to spend more on infrastructure and protect jobs.

“These policies are in the right direction,” said Pinpoint Asset Management’s Zhang Zhiwei in a note.

“While (Lan) didn’t say explicitly that they will raise fiscal deficit, I think his comments imply that it is possible the government will raise fiscal deficit above three percent for next year,” he wrote.

Such a move would represent a “meaningful shift” in Beijing’s fiscal policy approach, said Zhang, helping to “boost domestic demand and mitigate the deflationary pressure in the economy”.

But the impact of new policies on China’s broader economic outlook will depend on their “size and composition” — again, details that have yet to be announced — he said.

Long-term change ahead?

A major focus of Saturday’s news conference was the government’s efforts to shield local authorities from spiralling debt that could have negative spillover into the economy.

Xing Zhaopeng, senior China strategist at ANZ, said the messaging showed officials were focused on “derisking local governments”.

A new quota for treasury and local bonds, as well as a debt swap programme that could reach 10 trillion yuan ($1.42 trillion) in the coming years, is expected, he said.

Such moves would represent “long-term and structural change”, Xing added, noting that “local governments are the growth drivers in China”.

Other headwinds — including sluggish consumption and high youth unemployment — threaten to dampen economic vitality.

“Fiscal commitment needs to be more robust to offset the drag from households and the private corporate sector,” Gary Ng, senior economist at Natixis, told AFP.

Beijing had not yet decided on the size of its eventual fiscal stimulus package, said Ng, “meaning the impact on growth will depend on whether such announcements are enough to boost confidence.

“More needs to be done regarding implementation and injecting actual new fiscal money.”

BREAKING! India Orders All Pakistani Citizens To Leave Country

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5 hours ago

April 25, 2025

Ekwutos Blog

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In a significant escalation of diplomatic tensions, the Indian government has ordered all Pakistani nationals currently in India to depart by April 29, 2025. This directive follows a deadly terrorist attack in Pahalgam, Jammu and Kashmir, which resulted in the deaths of 26 individuals, including 25 Indian tourists and one Nepalese national. India has attributed the attack to Pakistan-based militants, a claim that Pakistan denies.

Key Measures Implemented by India:
Visa Suspension: India has revoked all visas issued to Pakistani citizens, effective from April 27. Pakistani nationals holding medical visas have been granted an extension until April 29 to leave the country .

Diplomatic Expulsions: Following the attack, India expelled Pakistani diplomats and has instructed all Pakistani citizens to leave the country by the specified date. Union Home Minister Amit Shah has directed state governments to ensure the implementation of this order .

Travel Advisory: The Indian government has advised its citizens against traveling to Pakistan and has urged those currently in Pakistan to return to India at the earliest opportunity .

Pakistan’s Response:
In retaliation, Pakistan has closed its airspace to Indian flights, suspended trade, and expelled Indian diplomats. The Pakistani government has also warned that any interference with the Indus Waters Treaty, a critical water-sharing agreement, would be considered an act of war .

International Reactions:
The United Nations has called for maximum restraint from both nations to prevent further escalation. The U.S. State Department has updated its travel advisory, issuing a Level 4 “Do Not Travel” warning for India’s Jammu and Kashmir region due to high risks of terrorism and civil unrest .

Conclusion
The situation remains tense, with both India and Pakistan taking steps that could lead to further deterioration of bilateral relations. The international community continues to monitor the developments closely, urging both countries to engage in dialogue to resolve their differences peacefully.

Sokoto to begin 2025 Hajj airlift on May 9 — Pilgrims agency

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15 hours ago

April 25, 2025

Ekwutos Blog

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The Sokoto State Pilgrims Welfare Agency has announced that the airlift of intending pilgrims for the 2025 Hajj exercise will commence on May 9.

Chairman of the agency, Aliyu Musa, disclosed this to journalists while giving an update on preparations ahead of the pilgrimage to Saudi Arabia.

He revealed that out of the 2,860 registered intending pilgrims from the state, 2,500 visas have already been processed.

“We have finalized arrangements with officials of Flynass Airlines, the airline responsible for airlifting intending pilgrims from the state to the holy land,” Musa said.

He explained that all logistical arrangements were being concluded to ensure a smooth and successful Hajj operation for pilgrims from the state.

According to Musa, this year’s pilgrims will be accommodated in the Masfala area of Makkah, a location familiar to many previous pilgrims from Sokoto State.

“This arrangement was made to ensure that our pilgrims are comfortable and settled in a known environment,” he added.

The chairman also announced a new payment approach for the Hadaya, stating that intending pilgrims will be required to pay for the Hadaya in Naira before departure.

“This is to prevent pilgrims from tampering with their Basic Travel Allowance (BTA) while in Saudi Arabia, which is capped at 500 dollars,” he explained.

Musa urged all intending pilgrims to conduct themselves responsibly and be good ambassadors of the state and the country during their time in the holy land.

“We are calling on our pilgrims to avoid any acts that could tarnish the image of Sokoto State and Nigeria. The Hajj is a spiritual journey, and it should be treated as such,” he advised.

Nigerian Singer Portable Treats Himself to a Brand-New FORD F150 Truck

Published

23 hours ago

April 25, 2025

Ekwutos Blog

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Controversial Nigerian singer Portable has splurged on a brand-new FORD F150 truck, flaunting his latest acquisition on Instagram.

In a video, Portable revealed that he topped up the N20 million given to him by Burna Boy after his victory over Speed Darlington in a celebrity boxing match.

The singer knocked out Speed Darlington in the first round of their highly publicized bout, held at the Balmoral Events Centre on April 19.

Burna Boy’s N20 million reward was a celebratory gesture for Portable’s impressive win. With some additional funds, Portable was able to purchase his sleek new ride.

Photo source: Instagram