However, the index has only recovered some of the losses incurred since the start of August, showing the scale of the slide in China’s markets.
Xiangrong Yu, economist at Citi, said the stimulus package “is not a game changer”.
He said: “We believe what’s lacking in the financial system is not liquidity but genuine credit demand.
“The policy rate and downpayment cuts would allow households to borrow more … and at lower costs.
Lynn Song, ING’s chief economist for Greater China, said without extra government spending, he will not upgrade his forecasts for GDP growth.
This gloom is a critical part of China’s weakness, according to Duncan Wrigley, chief China economist at Pantheon Macroeconomics, as it encourages families to save instead of spend.
But this means there is little consumer spending to boost the economy, which is struggling due to the collapse of the housing bubble. »
