Xi Jinping is considering a huge economic intervention to save China’s faltering economy, according to reports.
Li Qiang, Premier of the People’s Republic of China, urged leaders in the country for more “forceful” measures to sop share prices and investment from collapsing.
China’s benchmark CSI 300 index has lost a fifth of its value in just nine months.
This brings it to its lowest level since the start of 2019.
Li Qiang held a meeting in which new measures to improve investment and the value of listed companies in China, as reported by Bloomberg.
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One problem that has plagued the Chinese economy was the collapse of property giant Evergrande at the end of 2021, sparking a huge downturn in China’s property market.
Another is China’s aging population. National Bureau of Statistics data showed that the number of people aged 16 to 59 in the country accounted for 61.3 percent of mainland China’s population last year, down from 62 percent the year before.
This could leave the Chinese state struggling to help pensioners in the future.
Speaking to Bloomberg, Michael Hirson, an economist at 22V Research, said: “The biggest challenge that equity markets face is macroeconomic rather than technical. In an environment of weak private sector demand and prolonged deflation, it is hard to excite investors about the outlook for Chinese companies to grow revenue and profits.”
It has been reported that the Chinese Communist Party is considering a £222billion ($281billion) rescue plan to boost the Chinese markets.
Derek Irwin, an emerging markets portfolio manager at Allspring, an asset management firm, told Reuters: “Until there is a bigger crisis, the Chinese government may just continue to kind of throw cups of water on the fire instead of something big that they probably need to do.”
President Xi has previously said that China needs to focus on “high-quality growth” by investing in green and tech industries.
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