China's economic recovery efforts continue as the National Development and Reform Commission (NDRC) outlined new measures to support the struggling economy during a press briefing today. Zheng Shanjie, Chairman of the NDRC, highlighted the issuance of special purpose bonds to local governments, aimed at fostering regional growth. He confirmed that ultra-long special sovereign bonds totaling CNY 1 trillion have already been allocated for various projects. Additionally, the central government plans to unveil a CNY 100 billion investment plan for next year by the end of this month, a move that comes earlier than anticipated.

These announcements coincided with the reopening of Chinese markets after the Golden Week holiday, which started on September 30. Prior to the break, the government had committed to strengthening fiscal and monetary policy support and rolled out several stimulus measures designed to revive the property market. Zheng acknowledged the ongoing challenges, stating there are “many difficulties and problems” that still need addressing to meet China’s growth targets.

The market responded positively to these developments, with the Shanghai Composite index rallying 6% to surpass 3,500, while the Shenzhen Component surged 9% to reach 11,500. This marked the continuation of a historic rally that began in late September following the announcement of a sweeping monetary stimulus package to bolster the economy. As of now, the Shanghai and Shenzhen indexes are up over 30% and 40%, respectively, from their lows in September, firmly placing them in bull market territory.

Leading this surge were strong performances from major companies such as Contemporary Amperex (up 13.1%), Kweichow Moutai (up 4.2%), Ping An Insurance (up 8.4%), Wulianye Yibin (up 7.7%), and BYD Company (up 6.8%).

However, the offshore yuan experienced a decline toward 7.08 per dollar, reversing earlier gains as traders returned to the market. This shift in the yuan's value coincided with heightened interest in the NDRC briefing and potential additional policy measures aimed at revitalizing the economy. Traders are also eagerly awaiting the upcoming inflation and trade data, which are expected to provide deeper insights into the health of the world’s second-largest economy.

Meanwhile, China's 10-year government bond yield fell to around 2.14% as market activities resumed post-holiday. The earlier stimulus measures, including interest rate cuts and relaxed restrictions on property purchases, have set the stage for this shift in yield. Attention remains focused on today’s NDRC briefing, where updates on further policy initiatives are anticipated as Beijing underscores its commitment to achieving a growth target of around 5%.

As China navigates these economic challenges, market participants will closely monitor developments, hoping for effective measures that can stimulate sustained growth in the coming months.

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