Goldman Explains Why China's MOF Stimulus Announcement Is Likely To Disappoint

As noted earlier, expectations are high for China's MOF meeting scheduled for 10am local time on Saturday, as the topic of fiscal stimulus has fast become the major data point/area of interest for Chinese investors. Bloomberg has reported today that Chinese investors expect $283BN of new stimulus this weekend.

This number is in-line with Goldman economist Lisheng Wang's expectations but the figure should not be announced on Saturday by the MOF.  Rather, the National People's Congress (NPC) standing committee meeting, likely during late October or early November, sets the budget and the MOF raises the proceeds.  Separately, Yu Dong, an acidemia and an official, closely related to the central govt decision-making bodies for the economy, wrote, "While it is for sure that there will be “X Trillion RMB”-scale  stimulus, people need to have a little bit patience because certain legal procedures might still be needed and don’t be disturbed or discouraged just because certain market participants  intentionally call a very big # expectation and then say “below expectation”."  (Link)  He encouraged people to think about all these press conferences and meetings as an integrated plan. Don’t look at each press conference or meeting as an isolated event.