Explainer | How China’s 2024 stimulus compares with past packages, and what’s next?
In nominal terms, the massive package has the potential to be China’s biggest ever
China has tried writ-large stimulus before. Here we take a look at what has been done in the past, and what to expect in the near future, according to two international investment banks.
How big could this round of stimulus be?
The total size of China’s stimulus package this year, including plans announced last week, is estimated to be about 7.5 trillion yuan (US$1.07 trillion), or equivalent to 6 per cent of the country’s GDP in 2024, Deutsche Bank said in a research note on Thursday.
This could “potentially become the largest in history, in nominal terms”, if the government delivers on all of the announced measures, according to Deutsche Bank.
The 7.5-trillion-yuan estimate includes a combined 2.5 trillion yuan cut in mortgage-debt servicing and two new 800 billion yuan “facilities” for the stock market, according to announcements on September 24 by the People’s Bank of China.
The central bank also factored in an estimated 2 trillion yuan worth of bond issuance to help consumers and encourage local government spending, along with an additional 1 trillion yuan in capital for major state-owned banks, as the Politburo meeting on September 26 committed to more fiscal stimulus.
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