On September 26, 2024, China's latest stimulus measures have propelled gold futures to unprecedented levels, surpassing $2,700 per ounce. This surge is a direct response to the Chinese government's efforts to stabilize its struggling housing and financial markets.
According to reports, the Chinese authorities are considering injecting up to 1 trillion yuan (approximately $142 billion) into major state banks to enhance their capacity to support the economy. This funding will primarily come from the issuance of new special sovereign bonds. Additionally, the government plans to implement 'necessary fiscal spending' to achieve a targeted growth rate of around 5%, including one-time cash handouts for lower-income citizens.
As part of these measures, the government aims to stabilize the residential real estate market, focusing on completing unfinished projects and adjusting land, fiscal, tax, and financial policies. The Shanghai Composite Index rose by 3.6%, while the Hang Seng Index increased by 4.2%, indicating a positive market response.
These developments in China could have significant implications for the global economy, particularly as the country remains the world's second-largest economy. Stabilization efforts could influence inflation rates and market sentiment worldwide, especially among commodity prices, which have also seen an uptick.
Source: therussophile.org, September 26, 2024.