DeepDive: Politburo Update April 2024

The Politburo adopted a notably more supportive tone in its meeting earlier this week and offered unusually specific directives on measures to further prop up the economy. Our Politburo update delves into the potential implications for fiscal and monetary policy, as well as the property market and foreign trade sector.

The Politburo was unusually specific in detailing measures that it wants to be taken to further bolster the economy. It placed a stronger focus on fiscal policy, singling out the need to frontload the issuance of the ultra-long government bond announced earlier this year, along with special purpose bonds.

It also called for a swifter implementation of policies already announced, which includes the one-trillion yuan sovereign bond issued last year, to preempt a scenario where policymakers might have to loosen more later in the year due to overly tight policies now. This points to an increasing sense of urgency and signals some concern about the pace of policy implementation and support so far this year.