Hong Kong, Oct 7 (Alliance News): After four challenging years, Hong Kong’s stock market has finally given some relief to Francis Lun, who manages a small brokerage in the city.
Since 2020, the Hang Seng Index has suffered a historic slump due to economic struggles and strict pandemic restrictions both in Hong Kong and mainland China.
However, in late September, China’s top leadership unveiled a series of measures to revive the faltering economy, igniting an 18% surge in the Hang Seng Index over two weeks—the biggest rally in nearly two decades.
Lun expressed a cautious optimism. “Before the announcement, there was almost no business. But now, things are starting to pick up,” he said from his office in Causeway Bay.
While the rally has boosted Hong Kong and China’s markets, questions remain about whether these stimulus measures will extend benefits beyond stock investors to the broader economy.
The real economy continues to face significant challenges, including a looming deflationary spiral and risks of missing its 5% growth target.
The measures so far have focused on monetary policy, which influences borrowing costs and inflation control. However, economists argue that more robust fiscal policies are required to rebuild consumer confidence and stimulate public spending.
Ray Dalio, founder of Bridgewater Associates, suggested that China may need a “whatever it takes” approach to fully reignite its economy.
The next major update could come as soon as Tuesday when China’s National Development Reform Commission is expected to announce further policies to support economic growth.