PBOC Says Economy Is Job #1, Week In Review

Week in Review

• Asian equities were mostly higher this week, led by growth stocks as China’s markets cheered further indications of government support for the platform economy.
• US Treasury Secretary Janet Yellen completed a successful trip to China, indicating the importance of trade between the US and China and that any new investment restrictions would only apply to private investments in sensitive industries.
• China’s government released 16 measures to support the real estate sector this week, which include extending the due date for loans due in 2023 to next year.
• US Secretary of State Antony Blinken met with senior Chinese diplomat Wang Yi at the ASEAN Foreign Ministers’ Summit in Indonesia on Thursday.

Key News

Asian equities ended a strong week on a higher note except for Japan, while Taiwan, South Korea, Malaysia, and Thailand outperformed.

It was a fairly quiet ending to a strong week as news of the Blinken-Wang meeting in Indonesia was widely circulated. The State Council held a press conference at which the central bank’s Deputy Governor Liu Guoqiang commented on the economy. While acknowledging the headwinds faced following the pandemic, the PBOC will “…focus on expanding effective demand, and strengthen the deployment of policy measures reserves.” Liu noted the economy’s choppy, incremental recovery so far, though mentioned that the second half of the year should see a continued gradual recovery. He addressed concerns on deflation, while noting the PBOC’s “prudent monetary policy”. Clearly, the economy is job #1 for the central bank.