Chinese government officials have cleared the way for fresh stimulus measures to halt the worsening economic slowdown in the World’s second largest economy, sending stock markets around the world higher.
At the close of a key meeting of China’s leadership, the government announced a series of reforms, including plans to make China’s monetary policy more flexible and to expand the government’s budget deficit next year, Yahoo reported.
The raft of measures is expected to provide much needed support to a painful slowdown in the house-building sector in China.
Chinese stocks reversed initial losses and ended Tuesday slightly higher, with a resurgence in property shares helping to push the blue-chip index of the biggest companies to a fresh four-month high.
The Shanghai Composite Index gained 0.3%, to 3,651.77 points.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.4% higher, after Wall Street logged solid gains overnight.
Financial spreadbetters at IG expected Britain’s FTSE 100 to open 0.4% higher. Germany’s DAX was forecast to open 0.6% higher, while France’s CAC 40 was expected to gain 0.6%.
Monetary policy must be more “flexible” and fiscal policy more “forceful” as leaders create “appropriate monetary conditions for structural reforms,” according to statements released at the end of the government’s Central Economic Work Conference by the official Xinhua News Agency on Monday. It said the fiscal deficit ratio should be raised gradually.
The government’s annual growth target is typically set at the gathering, though not announced. President Xi Jinping has previously suggested the nation must meet a minimum annual average growth pace of 6.5% through 2020.
