JPMorgan Econ FI-China’s policy easing A comparison with 2015-16-106261694

HaibinZhu(852)2800-7039TingtingGe(852)2800-0143AsiaPacificEconomicResearchJPMORGANhaibin.zhu@jpmorgan.comtingting.ge@jpmorgan.com01February2024JPMorganChaseBank,N.A.,HongKongBranchJPMorganChaseBank,N.A.,HongKongBranchGraceNg(852)2800-7002JiYan(852)2800-7673grace.h.ng@jpmorgan.comji.yan@jpmorgan.comJPMorganChaseBank,N.A.,HongKongBranchJPMorganChaseBank,N.A.,HongKongBranchChina’spolicyeasing:AFigure1:China70-cityhousingpricescomparisonwith2015-162010Dec=100,bothscales•Thechallengesfacedbytheeconomysharealotof160140similaritiesto2015-16150Newhome113305•Policyresponseshavesomeoverlapbutarealsodiffer-140Secondaryhome(RHS)125ent,overallmoremodestthistime130120•Herewecomparefiscal,monetary,housingand120115exchangeratepolicyresponses110•Thegovernmentcanstepuppolicyeasing,more110105importantlyrebalancepolicysupport100100SincethePolitburomeetinglastJuly,Chinahasrolledoutaseriesofeasingmeasurestostabilizegrowth.Thepaceof95policyeasinghasbeenmodestandpiecemeal,coveringarangeofareasincludingfiscal,monetary,housing,exchange9090rateandcapitalmarketpolicies.Manyinthemarketsexpressdisappointmentatthepaceofpolicyeasing,rasingquestions1112131415161718192021222324aroundthescopeforpolicyeasing,anditseffectivenessandmagnitudecomparedtopriorepisodes.Inourview,thepolicySource:NBS,J.P.Morganeasingin2015-16(link)servesasagoodbenc...