Greg Gibbs, Analyst at Amplifying Global FX Capital, notes that the Chinese authorities have made many announcements over recent weeks, including new policies and commitments to support its stock markets, provide lending support for the private sector, and increase fiscal spending.
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“This has helped stabilise the equity market, but it has not generated a sustained rebound in Chinese stocks, and the CNY has resumed a steady weakening trend.”
“A good deal of the confidence slump in the Asia region relates to US trade policy, including 10% tariffs across around half of Chinese exports to the USA, and threats to increase and broaden tariffs at the beginning of next year.”
“However, there may be deeper problems with the Chinese economy related to efforts over recent years to clean up excesses in its credit markets.”
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