His economic adrenaline shot only bought China some time

September 24, 2024 at GMT+8 23:00

The market's reaction to the policy blitzkrieg shows that Pan Gongsheng, a technocrat who once worked at Harvard and Cambridge, has bought some precious time for China's economy. But economists believe this is just a down payment.

"I don't think this is enough to address the root issues behind China's slide into a deflationary spiral," said Duncan Wrigley, chief China economist at Pantheon Macroeconomics. He added that what China needs is "a package of reforms to fundamentally reconfigure the economy and unleash consumption growth."

According to informed sources, Tuesday's briefing was hastily arranged just 48 hours earlier.

Regulatory officials who asked not to be named said they suddenly received requests for more information last week, forcing some to discuss private matters overnight ahead of Tuesday's briefing.

"Many of China's problems are driven by demand or confidence," said Nigel Peh, portfolio manager at Timefolio Asset Management Co. "Overall, I don't think these measures will work because China's problems are complex. And there is no silver bullet.

With the central bank taking unexpected measures that surprised the market, the focus is now on the Ministry of Finance. More fiscal measures may be introduced in the coming days.