• News
    • Stocks
    • Banks and Finance
    • Companies
    • Crypto
    • Forex
  • Videos
  • Articles
    • Forex CRM
    • Crypto Payments
    • Trading
    • Crypto Exchange Business
    • Forex Business
    • Fintech
    • Liquidity
    • FinTech Awards
  • Liquidity Providers List
  • Crypto Payment Providers

Dark Theme

Shanghai Rolls Out New Stimulus. It Sounds Better Than It Is, Analysts Say

Jun 01, 2022

Shanghai Rolls Out New Stimulus. It Sounds Better Than It Is, Analysts Say

The Shanghai administration has launched a series of 50 stimulus measures aimed at reviving the city's economy, which was heavily damaged by a month-long lockdown during China's worst Omicron Covid-19 virus epidemic. In addition to the normal supply-side efforts, the measures include endeavors to stimulate consumption and assist overseas enterprises. Analysts, however, remain suspicious of their effectiveness.

The Chinese government has promised a slew of economic stimulus measures for Wuhan, the hub of the coronavirus epidemic. The plan includes tax breaks and incentives for businesses, as well as aid for logistical networks. Some experts, however, believe that the measures fall short of addressing critical concerns such as consumer demand and foreign corporations.

Michael Pettis, a finance professor at Peking University, believes that increasing consumption could help reinvigorate the Chinese economy in a way that is much needed following years of over-investment in areas such as infrastructure and real estate. According to an expert, in order for a policy to produce a demand-side boost to the economy's consumption share, it must either increase household income or increase household debt.

"Most of the 50 measures are directed towards boosting production, with only a few targeted at boosting consumption," he added. "This imbalance means that demand is not being rebalanced effectively."

China Beige Book International CEO Leland R. Miller agreed. "There appears to be a good degree of investor optimism surrounding the new Shanghai initiatives," he told Barron's. "If for no other reason than the government is finally addressing the serious falloff in growth with genuine action rather than just pledges."

"However, these plans will fall short for the same reason that past Covid-era stimulus failed to grow the economy sustainably: they are mainly concentrated on the supply side, and the consumer emphasis is too modest at this moment to actually shift the needle."

Automobile purchase incentives are among the consumption components. Last month, new automobile sales fell 47 percent year on year as manufacturing stopped and buyers were confined to their homes, not only in Shanghai.

Tesla (TSLA) cautiously resumed operations in Shanghai earlier this month after being sidelined for 22 weeks. Over the weekend, Chinese media claimed that the company's huge factory in the city — the world's largest EV vehicle factory — is slated to resume full production in June. Requests for comment were not returned by Tesla.

Another consumer component is a home appliance trade-in program, as well as the distribution of specific monies for the film industry, cultural and creative industries, sports development, and tourism. There were few details.

One policy component in the consumption-boosting section garnered snickers from online Chinese observers: "Optimize the 'Shopping Festivals' strategy by introducing themed shopping festival activities in a timely way." The lengthy paragraph describing how such events will aid in economic regeneration provided no details on what the government would do.

Most visitors are perplexed by China's plethora of retail festivals. The trend began years ago with Alibaba Group Holding's (BABA) Double 11 Festival, commonly known as Singles' Day, which has evolved from a one-day celebration to an almost month-long sales barrage.

JD.com (JD) quickly followed with its own sales frenzy, and there are now sales events for Valentine's Day, Women's Day, Mother's Day, Children's Day, Christmas, I Love You Day, Fever Shopping Festival, Men's Festival, and a slew of other holidays.

Another component of the report focused on international enterprises and investment. Pledges, however vague, were anticipated to address the international community following the unprecedented action of the numerous foreign chambers of business in Shanghai, loudly decrying the lockdown's damages and pushing away foreign talent.

The area claims to help multinational corporations resume production and rejoin supply lines, as well as to "strengthen face-to-face engagement with executives of foreign-funded firms." However, detailed actions, money amounts, and dates were essentially non-existent.

The majority of the paper reverted to China's preferred stimulus technique — supply-side measures such as infrastructure spending and company tax cuts.

"Most likely, this strategy is aimed to prevent more economic harm — and maybe preserve certain officials' careers — rather than create any kind of real rebound," said China Beige Book's Miller.

Subscribe Our Newsletter

Binance Ceases Crypto Derivatives Trading in Europe
Binance Ceases Crypto Derivatives Trading in Europe

The most troubled cryptocurrency exchange Binance continues to restrict its services in response to growing regulatory scrutiny throughout the world, namely by partially shutting down derivatives trading.

Crypto
Shift4 Payments Is Expanding. Its Stock Plunged Tuesday.
Shift4 Payments Is Expanding. Its Stock Plunged Tuesday.

The two transactions are projected to increase payment volume by $15 billion and adjusted profits before interest, taxes, depreciation, and amortization, or Ebitda, by $35 million in 2023, according to a statement.

Stocks
Constantine

5 Most Successful FinTech Industry Startups in 2022
The financial services industry is undergoing a paradigm shift as a result of technological advancements, which are actively displacing traditional players and traditional business models. Significant changes are achieved through the integration of new financial solutions, reduction in the cost of certain functions, improvement in efficiency and quality of business, and a positive impact on the sustainability of core business development.

discover
What is the Liquidity Ratio?

Liquidity Provider

What is the Liquidity Ratio?

The notion of liquidity is exceptionally important in all financial markets, as traders/investors want to understand how many chances they have to buy and sell a certain asset by the market price.

Liquidity

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries b2broker

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Tamta

    What Is Crypto Arbitrage Trading?

    https://liquidity-provider.com/app/uploads/2023/06/cover-1-800x540.jpg

    Tamta

    Guide to Craiyon: How To Use a New DALL-E Mini

    https://liquidity-provider.com/app/uploads/2023/06/cover-5-800x540.jpg

    Tamta

    Credit Cards vs. Debit Cards

    https://liquidity-provider.com/app/uploads/2023/06/cover-800x540.jpg

    Tamta

    Investing In Private Equity: What Should You Know?

    https://liquidity-provider.com/app/uploads/2023/05/cover-7-800x540.jpg

    Tamta

    What is Data Analytics? Techniques, Tools, Methodology, and More

    https://liquidity-provider.com/app/uploads/2023/05/cover-6-800x540.jpg

    Tamta

    Bitcoin Halving is Coming: What Does it Mean for the Crypto Market?

    https://liquidity-provider.com/app/uploads/2023/05/cover-4-800x540.jpg

    Tamta

    Crypto Token Supply From A to Z

    https://liquidity-provider.com/app/uploads/2023/05/cover-3-800x540.jpg

    Tamta

    What Is ChatGPT, And How Can You Use It?

    https://liquidity-provider.com/app/uploads/2023/05/cover-2-800x540.jpg

    Anton

    Trading on Autopilot: The Rise of Crypto Trading Bots

    https://liquidity-provider.com/app/uploads/2023/05/cover-1-800x540.jpg

    Tamta

    Crypto Investing vs. Crypto Trading: What’s The Difference?

    https://liquidity-provider.com/app/uploads/2023/04/cover-5-800x540.jpg

    Tamta

    Understanding Indexed Universal Life Insurance (IUL)

    https://liquidity-provider.com/app/uploads/2023/04/cover-4-800x540.jpg

    Tamta

    Best Investment Strategies For Beginners

    https://liquidity-provider.com/app/uploads/2023/04/image1-800x540.jpg

    Tamta

    Understanding Perpetual Futures: How Do They Work?

    https://liquidity-provider.com/app/uploads/2023/04/cover-3-800x540.jpg

    Tamta

    What Is A Bitcoin Stock-To-Flow Model? Beginner’s Guide

    https://liquidity-provider.com/app/uploads/2023/04/cover-2-800x540.jpg

    Tamta

    Best Decentralized Crypto Exchanges In 2023

    https://liquidity-provider.com/app/uploads/2023/04/cover-1-800x540.jpg

    Tatma

    Best High-Yield Savings Accounts For March 2023

    https://liquidity-provider.com/app/uploads/2023/04/cover-800x540.jpg

    Tamta

    Crypto Trading For Beginners

    https://liquidity-provider.com/app/uploads/2023/03/cover-8-800x540.jpg

    Tamta

    How To Make Money With Cryptocurrency

    https://liquidity-provider.com/app/uploads/2023/03/cover-7-800x540.jpg

    Tamta

    What Is A Candlestick Chart?

    https://liquidity-provider.com/app/uploads/2023/03/cover-6-800x540.jpg

    Constantine

    White Label Forex Software — Ultimate Guide on How to Choose The Best Industry Solution

    https://liquidity-provider.com/app/uploads/2023/03/cover-3-300x203.jpg

    Tamta

    Forex Trading: A Beginner’s Guide

    https://liquidity-provider.com/app/uploads/2023/03/cover-2-300x203.jpg

    Tamta

    How to Create a Cryptocurrency

    https://liquidity-provider.com/app/uploads/2023/03/cover-1-1-800x540.jpg

    Tamta

    Top Ten Richest People In The World, 2023

    https://liquidity-provider.com/app/uploads/2023/03/cover-4-1-300x203.jpg

    Constantine

    What’s at Stake? Here’s How to Avoid Scam Tokens

    https://liquidity-provider.com/app/uploads/2023/03/cover-5-300x203.jpg
    • News
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
    • Articles
      • Forex CRM
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
    [email protected]

    © 2023 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy