China asset watch: Keys for Xi to getting the economy and equities back going
The China week is running full steam here at Steno Research and today we focus on Chinese assets and equities and see how both Joe Biden and Muhammed Bin Salman would react to different Chinese stimuli scenarios.
The Chinese economy’s sluggishness calls for implementing measures to stimulate. We see 4 measures with the potential for helping the wobbly economy with different reactions from Biden and Xi’s new found friend MBS.
1) releasing oil reserves, 2) rate cuts (already happening), 3) incentivizing FDI inflows and 4) fiscal stimulus.
Chart 1: Biden looking like the overall winner if Xi wants to save his economy
What are the options on the table for Xi? And how will Chinese assets react to different types of stimulus? We take a look at the scenarios in this piece and find that things may be improving already from a rate of change perspective.
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