28 Apr 2015
Chinese QE on the cards? – DB
FXStreet (Edinburgh) - Jim Reid, Analyst at Deutsche Bank, reviewed the recent rumours regarding the likeliness of QE in China.
Key Quotes
“Commenting yesterday on the QE hints, our China economist Zhiwei Zhang noted that the government has been silence on this”.
“If the story was true it would reinforce his view that China has entered a significant policy easing cycle”.
“The story also shows the willingness of the central bank to co-ordinate with the Ministry of Finance to jointly resolve the local government debt issue in China”.
“In reality SOE reform hopes were also one of the drivers of yesterday’s stock rally on reports that the government may consider merging Petrochina and Sinopec into one giant integrated oil company”.
“There were also reports citing that China is considering a wave of SOE restructuring which would reduce the number of state owned companies to 40 (from 112). The story has been denied by the Chinese authorities and Petrochina itself overnight”.
Key Quotes
“Commenting yesterday on the QE hints, our China economist Zhiwei Zhang noted that the government has been silence on this”.
“If the story was true it would reinforce his view that China has entered a significant policy easing cycle”.
“The story also shows the willingness of the central bank to co-ordinate with the Ministry of Finance to jointly resolve the local government debt issue in China”.
“In reality SOE reform hopes were also one of the drivers of yesterday’s stock rally on reports that the government may consider merging Petrochina and Sinopec into one giant integrated oil company”.
“There were also reports citing that China is considering a wave of SOE restructuring which would reduce the number of state owned companies to 40 (from 112). The story has been denied by the Chinese authorities and Petrochina itself overnight”.