China's Strategic Economic Stimulus Plan Unveiled for 2024 U.S. Presidential Election - Evercore ISI Analysis
In a recent report, Evercore ISI revealed that China is strategically staggering its economic stimulus measures, citing concerns over the potential outcome of the 2024 U.S. presidential election. The firm believes that Beijing is holding back some of its fiscal firepower in case Donald Trump wins, as this could bring geopolitical and economic uncertainties that would require more aggressive intervention.
At a recent National Development and Reform Commission (NDRC) press conference, no new fiscal stimulus was announced. Instead, existing policies were emphasized, including a 150 billion yuan consumption subsidy scheduled for September to December. Additionally, the commission announced plans to advance 200 billion yuan of infrastructure investment, originally planned for 2025, into the latter part of 2024. Despite these measures falling within planned budgets, some were disappointed by the lack of immediate larger support.
Although the absence of new stimulus was seen as a setback by Evercore ISI analysts, they believe that more fiscal action is still on the horizon. Data releases and a Politburo meeting in October may provide opportunities for further policy announcements. The analysts maintain confidence in China achieving its 5.0% GDP growth target for 2024.
Beijing's decision to withhold stimulus at present could be a strategic move to conserve resources for potential future challenges, especially if Trump is re-elected, which could strain U.S.-China relations and the global economy. Evercore ISI stated, "We remain of the view that Beijing would reserve firepower for the scenario of Trump winning the US election," indicating China's cautious approach in balancing short-term economic support with long-term geopolitical risks.
In conclusion, China's decision to stagger economic stimulus measures in light of the 2024 U.S. presidential election reflects a strategic approach to navigating potential uncertainties. Investors should closely monitor developments in China's economic policies as they could have significant implications for global markets and their investment portfolios.