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Analysts at Nomura point out that the Chinese President Xi Jinping has pledged support for the struggling private sector, assured more tax cuts and bailout funds, promised equal treatment of the private and public sectors and guaranteed protection of personal and property rights.

Key Quotes

“Earlier, on 20 October, Mr. Xi wrote an open letter to private business owners saying that the Communist Party would continue to value and protect them. The deleveraging campaign that intensified in late 2017 and some ill-conceived government policies over the past couple of years had a disproportionally negative impact on the private sector this year, so we view these latest moves by Mr. Xi as an apparent effort to boost market confidence at a time when China’s economic growth faces a worse-than-expected slowdown, its stock markets have tumbled and the private sector is being financially squeezed. In this regard, we also view these moves as the kind of concessions we had expected in late May.”