Market

What’s happened? On September 24th a series of policies were announced by China’s three top financial officials at a press conference to backstop the stalling economy. These notably included a 20-basis-point cut to the seven-day reverse repo rate (RRR; the policy interest rate); a 50-basis-point cut to the reserve requirement ratio (RRR); a rate cut on existing mortgages; capital replenishment of large state-owned banks; and other measures to support the housing and the stock markets. Why does it matter? The rare, simultaneous rollout of so many measures highlights the urgency for policymakers to prop up the economy. We believe that real GDP growth this year will miss the government’s annual target, and may even undershoot our own conservative growth forecast of 4.7%. The cuts to...

When Mauricio Macri was elected president of Argentina in 2015 as leader of the center-right coalition Cambiemos, he adopted a confrontational stance on China, distancing himself from the approach of his predecessor, Cristina Kirchner. He instead privileged relations with the United States and other Western powers to “reinsert Argentina into the world.” It did not last. By the end of his first year in office, Macri had signed a series of economic agreements with Beijing. By the end of his administration in 2019, China had consolidated its role as a strategic partner. Similarly, Javier Milei came to the Casa Rosada skeptical about Argentina’s friendship with China. In his case, however, the libertarian leader also brought an ultra-ideological and personalistic approach to foreign policy...

C hina's consumer inflation rate slowed in September, official data showed Sunday, in a sign that demand remains fragile in the world's number two economy. The slowdown comes as authorities have been seeking to boost domestic activity and shore up China's ailing property sector, with officials on Saturday announcing plans for a significant fiscal stimulus package. The consumer price index (CPI), a key measure of inflation, rose 0.4 percent year-on-year in September, down from the 0.6 percent recorded in August, the National Bureau of Statistics (NBS) said. The figure came in below the 0.6 percent forecast in a Bloomberg survey of economists. August's figure, the highest level since February, had raised hopes that consumer confidence may be picking up. While many major Western economies ha...