(Bloomberg) — China will brief on a plan to allow local governments to refinance their off-balance-sheet debt at 4 p.m. on Friday in Beijing, where officials are expected to unveil more details of a fiscal package to help the slowing economy.
Most Read from Bloomberg
Finance Minister Lan Fo’an and Xu Hongcai, director of the budget committee of the National People’s Congress, will speak with the media at the end of a weeklong meeting of the country’s top legislative body. A press invitation doesn’t mention any policy plan other than the debt swap program reviewed by top lawmakers earlier this week.
Bloomberg Terminal users can click here for a live blog of the briefing.
China’s CSI 300 Index extended declines in the final 30 minutes of trading onshore, following announcement of the briefing, before closing 1% lower. The Hang Seng Index fell 0.8% as of 3:28 p.m. local time.
The debt swap program is “partial, and certainly far from a direct countercyclical measures,” said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group Ltd. “The market is looking for a direct injection say one trillion yuan or 2 trillion to support growth.”
Investors have been awaiting the Standing Committee of the National People’s Congress to give a fuller picture of China’s fiscal plan after Lan in mid-October promised additional measures to revive confidence. He hinted at a refinancing plan that would ease local governments’ debt burden and give them more room to drive growth, although some analysts have argued that more direct fiscal stimulus is needed to turn around the economy.
China’s economy grew 4.6% in the third quarter, the weakest pace since March last year, putting in doubt Beijing’s ability to hit its annual expansion target of around 5%. That slowdown prompted policymakers to pivot toward more supportive policies, including interest-rate cuts and help for the stock and real estate markets.
The shift has triggered a historic stock rally and driven global banks including Goldman Sachs Group Inc. to upgrade their forecasts for the $18 trillion economy. Key indicators for October showed signs of a stabilization in the economy, but Donald Trump’s reelection this week has fueled calls for Beijing to strengthen policies to boost demand to offset a potential drop in exports in the event of a new trade war.
