Wed Oct 09 08:02:51 UTC 2024: ## China’s Stock Rally Stalls After Disappointing Stimulus Announcement

**SHANGHAI/HONG KONG** – China’s stock market experienced a roller coaster ride on Tuesday, with a strong rally initially fueled by hopes for further stimulus measures but ultimately stalling after a lackluster press conference by the National Development and Reform Commission (NDRC).

The Shanghai Composite Index surged over 10% early in the day, following a recent uptick spurred by government announcements of stimulus measures including rate cuts and loosened housing restrictions. However, the rally fizzled as the NDRC’s press conference, aimed at boosting market confidence, failed to deliver any concrete details on additional fiscal stimulus. By the end of the day, the Shanghai Composite Index had gained a more modest 4.59%, while the Shenzhen Component Index rose 9.17% and the ChiNext Index experienced its largest ever single-day increase, up 17.25%.

In contrast, Hong Kong’s Hang Seng Index closed with a significant 9.41% drop, erasing gains made before the National Day holiday.

Investors had hoped the NDRC, China’s state economic planning body, would unveil more specific stimulus measures at the press conference. While Chairman Zheng Shanjie expressed “full confidence” in reaching the country’s official 5% growth target, he only outlined broad policy areas including addressing economic downturn, weak domestic demand, enterprise difficulties, property market weakness, and capital market instability.

Experts have criticized the NDRC’s vague approach, arguing that the lack of concrete measures and unclear implementation plans leave shareholders unsure about the government’s commitment to reviving the economy.

“The NDRC has talked a lot about boosting consumer confidence but has not issued any specific practical policies,” said Chin-Yoong Wong, a professor of economics at Universiti Tunku Abdul Rahman in Malaysia.

Further contributing to market volatility are concerns about external factors, including a potential slowdown in the U.S. economy, which could lead to a withdrawal of international investment from China.

While some experts see potential for growth in green industries and infrastructure, others warn about the challenges posed by China’s foreign relations, particularly the trade disputes with Canada and the EU.

Tsai Ming-Fang, a professor of industrial economics at Tamkang University, believes the recent stimulus measures are more focused on achieving the 5% growth target than on genuine economic revitalization, potentially leading to short-term gains followed by a sell-off.

“Many problems arise from the drastic changes in Chinese laws [in recent years], which have led to a lack of confidence of manufacturers in China,” said Tsai.

The Chinese stock market’s future trajectory remains uncertain, as investors grapple with mixed signals and a lack of clear direction from the government.

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