China's Stimulus Strategies: Balancing Growth and Stability

China's stock markets experienced volatile trade amid new stimulus promises that lifted property shares but didn't reignite last month's euphoria. The Finance Minister emphasized intentions to raise government debt, aiming to drive growth. Despite mixed market reactions, real estate shares surged, reflecting growing confidence in economic policy measures.

China's stock markets navigated a volatile trading session on Monday, buoyed by stimulus promises that propelled property shares upward but fell short of last month's euphoria. The Shanghai Composite and blue-chip CSI300 indices rose over 1.5% by midday, collectively adding $146 billion in market value, despite a rocky performance from Hong Kong shares, which saw the Hang Seng index dip 0.4% amid heavy trading.

Since late September, China's financial landscape has been on a rollercoaster, triggered by a series of rate cuts and government economic rescue expectations. Finance Minister Lan Foan, speaking at a Saturday news conference, reiterated plans to boost growth by raising government debt, though specifics on spending were not disclosed. His commitment, however, was sufficient to buoy markets, particularly real estate shares in Hong Kong and the mainland.

Despite facing a prolonged slump in consumer confidence and property sector challenges, China's policy-driven growth plans are gaining traction. Goldman Sachs forecasts recent measures could add 0.4 percentage points to next year's growth. As the CSI300 index surged over 20% following policy announcements since September 24, investors like Yuan Yuwei stress the need for steady growth rather than rapid rallies that may harm retail investors.

(With inputs from agencies.)