Chinese Pledge Moderately Loose Policy 12/09 06:00

   China's top leaders have pledged to loosen monetary policy and provide more 
support for the slowing economy, while Premier Li Qiang swiped at threats of 
higher tariffs on Chinese exports, saying they hinder global growth.

   BANGKOK (AP) -- China's top leaders have pledged to loosen monetary policy 
and provide more support for the slowing economy, while Premier Li Qiang swiped 
at threats of higher tariffs on Chinese exports, saying they hinder global 
growth.

   Shares in Hong Kong jumped Monday after state media released a report on the 
meeting by the ruling Communist Party's Politburo that said leaders would 
"implement more active fiscal policies and moderately loose monetary policies."

   The shift to "moderately loose" from the "prudent" monetary policies of the 
past 14 years was taken as a significant shift by market players, unleashing a 
spate of buying that pushed the Hang Seng index up 2.8%.

   "This marks a significant recalibration in their approach, aiming to cushion 
the anticipated economic shocks" (from higher tariffs), Stephen Innes of SPI 
Asset Management said in a commentary.

   Several months ago, the Chinese central bank and other regulators began 
rolling out various policies aimed at encouraging businesses and households to 
spend more money. Overall, Monday's statement mostly reiterated the same broad 
promises as usual.

   "The readout leaves little doubt that the shift toward a more supportive 
policy stance that began in September is still alive and well," Julian 
Evans-Pritchard said in a report. He noted that the last such shift was in late 
2008, during the global financial crisis, and that it may be followed by faster 
interest rate cuts in the coming year.

   Monday's meeting has set the tone for an annual economic planning meeting 
later in the week that will reaffirm policies for the coming year.

   China's economy has growing a bit more slowly than the official target for a 
5% expansion in annual terms this year, and the property market is still in the 
doldrums. Consumer spending remains subdued, having never fully recovered after 
the COVID-19 pandemic, and the statement from the Politburo meeting promised a 
"combination punch" of government spending and easier credit to help boost 
consumption.

   Consumer inflation in November was a lower-than-expected 0.2%, the 
government reported Monday, down from 0.3% the month before mainly due to lower 
food prices. That leaves ample room for interest rate cuts, analysts said.

   With youth unemployment still relatively high and many households feeling 
the pinch of lower housing prices and unstable jobs, the statement called for 
improving the "people's sense of gain, happiness and security."

   "We must do a good job in people's livelihood protection and security and 
stability the ensure the stability of the overall social situation," it said.

   Also Monday, Li, who as premier has the traditional role of overseeing the 
economy, met with heads of the World Bank and other big international financial 
organizations.

   Li did not refer to the United States by name, but took aim at countries 
that restrict trade through higher tariffs and other measures, in a veiled slam 
at Washington at a time when the U.S. has been tightening controls on exports 
of advanced technology, while President-elect Donald Trump is threatening to 
sharply hike import duties on Chinese products.

   "If we look at the obstacles to economic globalization, some countries now 
easily resort to imposing additional high tariffs, erecting barriers of 
protection. There are more and more restrictive measures on trade," Li said.

   "The reason why I'm talking about this issue is that under the background of 
weak economic growth of the world, this issue has further increased 
uncertainties and caused huge interference to the operation of the global 
economy," he added.