DeepDive: Politburo Update July 2024

In our latest Politburo update, we take a look at the recent messaging on the property market, consumption, and monetary and fiscal policy, and address what we believe are considerable misinterpretations of recent monetary and fiscal policy communication in the market and financial press. We also discuss some tweaks in references to consumption in the readout and highlight caveats based on a State Council policy plan to boost consumption issued over the weekend.

Last week’s Politburo meeting largely kept its policy communication on monetary policy unchanged, which remains accommodative but has been somewhat more hawkish since late last year, based on our textual analysis (see QuickScan: Politburo Update December 2023 and DeepDive: Nascent Signs of an Improving Outlook in the PBoC’s Messaging). The language on fiscal policy in the readout was also broadly unchanged, although the Politburo indicated that additional support measures should be prepared and deployed as appropriate, a change from previous communication, which largely focused on the implementation of existing policies (DeepDive: Politburo Update April 2024).