Chinese stocks in Hong Kong have fallen after Beijing’s high-profile fiscal stimulus plan failed to meet investor expectations. The Hang Seng China Enterprises Index dropped 1.6% by midday, with property and consumer-focused stocks leading the declines. Mainland China’s CSI 300 Index fluctuated, recovering from an initial 1.4% loss to trade flat.
The disappointment followed the announcement of a 10 trillion yuan ($1.4 trillion) debt restructuring package aimed at local governments. While the package was designed to alleviate mounting debts, it lacked direct measures to boost consumption. Analysts noted that the plan’s focus on debt relief without significant pro-consumption initiatives fell short of market hopes, particularly as the economy faces deflation and reduced growth forecasts.
Market reactions come amid renewed concerns over economic stability following Donald Trump’s election as US president. UBS downgraded its 2025 growth projection for China to around 4% and predicted an even slower pace for 2026, citing potential trade tensions and tariff threats.
The ongoing uncertainty has also driven foreign investors to pull capital out of China, with foreign direct investment declining by nearly $13 billion in the first nine months of the year.
Investor attention now shifts to the upcoming Central Economic Work Conference in December, where additional pro-growth measures may be announced. Finance Minister Lan Fo’an has hinted at “more forceful” fiscal policies in the future.