China’s stimulus package was a disappointment to the market and is not believed to boost growth

of China the stimulus package announced on Friday has been disappointing, and it is not believed to boost the country’s economic growth.

Even a huge amount of money was expected from the long-awaited package. The market had anticipated that if Donald Trump win the US presidential election, China would respond with a really big stimulus package.

However, this did not happen. On Friday, China announced a stimulus package worth 1,300 billion euros, the purpose of which is primarily to help regional local governments struggling with debt burdens.

in China let’s talk about the so-called of hidden debt, which the stimulus package is supposed to convert into ordinary debt. Now the debts are in financial companies owned by the regional governments and do not appear in the statistics. The majority of the hidden debt is to be cut by 2028.

The disappointment was caused by the fact that the stimulus package does not include any measures that would boost private consumption and thereby economic growth.

The market now believes that China will save its gunpowder until it is better clear what kind of actions Trump plans to take after taking office in January.

Trump’s planned import tariffs of up to 60 percent cast a shadow over China’s economic development. The threat of tariffs has made Chinese industrial companies nervous and caused some of them to move their production from China to other parts of Asia.

of China the financial difficulties have lasted for three years already.

The now announced stimulus package is already the second one this fall. The package announced in September included measures to help the struggling real estate sector, among other things.

It was enthusiastically received on the market, unlike the current package.

Finance Minister of China Lan Fo-an however, said at a press conference organized on Friday that in the future the capitalization of large banks and the purchase of unfinished properties will also be under investigation.