“PBoC expert” says consumption-focused stimulus is coming

Upcoming stimulus measures will reportedly focus more on boosting consumption.

On Monday, Caixin cited an unnamed expert close to the central bank (PBoC) as saying Beijing’s recent bundle of incremental economic support policies reflects a change in “policy logic”:

• “It encompasses not only short-term measures to boost demand but also numerous reform and structural adjustment plans.”

Echoing comments PBoC Governor Pan Gongsheng made in mid-October, the expert said the focus of macroeconomic policy will shift from:

• “Primarily favoring investment to balancing both consumption and investment, with a heightened emphasis on consumption”

The expert also said intensified efforts are needed to:

• “Substantially expand domestic demand”

Some context: It is unusual for Caixin to base a story solely on the remarks of a single anonymous expert, especially when numerous government and academic advisors consistently and publicly advocate for increased consumption support.

• That makes us suspect the expert is influential enough to warrant special attention.

Get smart: Household consumption has been chronically weak since the end of the pandemic, but Beijing has done little to revive it.

• If Beijing’s attitude toward supporting consumption is changing, that’s a big deal.

Get smarter: The finance minister has committed to providing more support for Beijing’s consumer goods trade-in program next year, but Caixin’s expert seems to be indicating that something more profound is coming.

Our take: Show us the policies!

• Until then, we’re keeping our enthusiasm in check.