He may be right, I may be crazy but it still looks as if China's efforts are a piecemeal approach to three intractable problems.
1) There is no way to change the demographic problem in anything less than a multi-decadal time frame.
2) It is an economic fact of life that potential growth for middle-income societies is slower than the potential rates for low or very-low-income societies.
3) The economic deadweight of debt at the central government, regional government and local government levels precludes any systemic solution to the indebtedness of the property-related sectors. That is: anything short of a Jubilee does nothing to halt the inexorable slide into steady-state entropy, the proverbial whimper rather than the bang.
And the problem with a debt-repudiation Jubilee is two-fold: a) it would reveal that China is dramatically poorer than the Chinese people currently believe; Ma and Pa Liu would be confronted with the fact their little apartment in Guangzhou, bought as a retirement asset, is only worth the discounted cash flow of what someone would be willing to pay in rent rather than the price the Liu's paid which is the value being carried on their mental balance sheet which b) massively shifts the reality and thus the perception of the winners and losers in the society.
China can maintain, or even boost near-term GDP-growth but only at the cost of pulling future growth forward. And the problem that you face is that someday the future arrives.
In the West this economic fact is not seen as a problem by the powers-that-be because by the time the future arrives the politicians who instituted the policies will have moved on to their consulting or lobbying or boards of directors jobs. In China however the Communist party expects to still be in power when the bill comes due.
From Marc Chandler at Bannockburn Global Forex:
Overview: Beijing's seemingly steady stream of measures to support the economy and steady the yuan are beginning to produce the desired effect. The yuan is snapping a four-week decline and the CSI 300 halted a three-week drop. Some economists estimate that the bevy of measures may be worth as much as 1% for GDP. The dollar is narrowly mixed ahead of the US employment data, which is expected to see the pace of job growth slow to around 170k. Of note, the Mexican peso extended yesterday's losses following news that the central bank was winding down its forward hedge program. After the peso dropped 1.75% yesterday, it is off another 0.7% today.
The MSCI Asia Pacific Index rose for the fifth consecutive session today and the Stoxx 600 gain (~0.4%) is recouping the losses of the past two sessions. US index futures are posting small gains. European benchmark 10-year yields are up 2-3 bp to trim this week's decline to 7-8 bp. The 10-year US Treasury yield is little changed near 4.11%. It is off about nine basis points this week. Gold is trading quietly and remains within Wednesday's range (~$1935-$1949). It is up around $29 this week or 1.5%. Oil is extending its rally after OPEC+ indicated plans to extend export cuts through October. October WTI is trading at new highs for the year near $84.55. It is up about 5.9% this week, making it the biggest weekly gain since March.
Asia Pacific
After hinting as much in recent days, Beijing announced that as of September 25, existing mortgage rates for first homes will be reduced. Officials also announced that the minimum down payment for first-time home buyers of 20% and a 30% for second-time buyers. The moves are designed to lend support to the residential real estate market and boost consumption....
....MUCH MORE
