China planning honcho’s comments push stock rally to 5th day
Positive news coming out of China’s 12-day annual national parliament over the weekend saying the Chinese economy isn’t going to experience a hard landing, but will remain on sound footing despite major structural reforms, extended the stock market’s rally to its fifth day on Monday.
Technology led the day, with the technology-focused board ChiNext Index jumping 2.4% to 1,953 after Beijing laid out its vision to become a tech power. Led by resources shares and small-caps, the Shanghai Stock Exchange Composite Index rose 0.8% to 2,897, and the Shenzhen Stock Exchange Composite Index jumped 2% to 1,742. However, weakness in the banking and property sectors caused the blue-chip CSI300 index to rise only 0.4% to 3,105.
China will absolutely not experience a hard landing,” Xu Shaoshi, head of the National Development and Reform Commission (NDRC), told reporters at a briefing on Sunday. “These predictions of a hard landing are destined to come to nothing.”
Xu, China’s top economic planner, also said China’s plans to reduce industrial overcapacity are unlikely to result in large-scale layoffs and that economic growth will create more jobs and help offset the impact of capacity cuts.
He did acknowledge that it will be challenging for China to maintain an economic growth rate of at least 6.5% over the next five years, as well as create more jobs and restructuring state-owned enterprises.