Markets rally after China's top body reiterates support

A port in Rizhao, east China's Shandong Province, April 27, 2022. (Photo: CFP)

Markets rallied on Friday after China's top decision-making body reiterated its support for the country's economy and called for additional measures to address concerns surrounding the real estate sector, investment and platform economies.

China's economy faces growing uncertainties and new challenges given the risks posed by the coronavirus pandemic and the Russia-Ukraine conflict, according to a statement released after a quarterly economic meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee.

According to Xinhua, the meeting pledged to expedite the implementation of supportive policies and make full use of monetary policy tools to stabilize the economy and meet this year's GDP growth target of 5.5 percent.

Reiterating that "houses are for living in, not for speculation," the meeting called on the local governments to launch region-specific property policies, according to the statement.

The meeting also called for "complete rectification" and healthy development of the platform economy.

Moreover, China's capital markets will be stabilized and long-term investments introduced, the meeting vowed.

Market rally

After the release of the meeting's statement, Chinese stocks closed higher on Friday, with the benchmark Shanghai Composite Index going up 2.41 percent to 3,047.06 points, while the tech-focused STAR 50 index surged by 4.88 percent to close at 947.15.

The Shenzhen Component Index closed 3.69 percent higher at 11,021.44 points.

Shares of Hong Kong-listed tech firms also rose, with the Hang Seng Tech Index rising by 4.01 percent to 21,089.39 points.

The meeting showed that the Chinese government recognizes the difficult situation and understands that its three tasks of containing COVID-19, maintaining growth and achieving security are becoming ever more challenging, Lu Ting, chief China economist of Nomura, said in a note on Friday.

China reported 5,659 new COVID-19 cases on Thursday, with active cases standing at 28,317, according to data released by China's National Health Commission on Friday.

China's economy grew by 4.8 percent in the first quarter from a year earlier, beating analysts' expectations for a 4.4-percent growth, while its consumption, real estate, and export were hit hard in March due to a new round of COVID-19 outbreaks in several cities, including the economic hub Shanghai.