China gears up for a big week as markets await U.S. elections and stimulus details

Published On Nov 3, 2024, 6:03 PM

China is preparing to announce a significant fiscal stimulus plan, with details expected to release soon after the U.S. presidential election. The stimulus size could vary depending on whether Donald Trump or Kamala Harris wins the election, with predictions that it could be 10-20% larger under Trump due to his administration's potentially more aggressive trade policies towards China. Analysts anticipate that the announcement will aim to bolster China's economy amidst domestic challenges like a real estate slump and weak consumer demand. The focus of the stimulus appears to be on government-related projects rather than direct consumer support, which could impact China's economic growth trajectory moving forward.

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Positive

Given the anticipation of a significant fiscal stimulus from China and its dependence on the U.S. election outcome, there is likely to be a positive impact on Chinese markets if the stimulus is substantial. However, uncertainty around the election results could cause volatility in short-term trading. If Trump wins, it may lead to increased tariffs but also larger stimulus measures, creating a mixed environment for investors. Overall, if markets react positively to the stimulus announcement, Chinese stocks, particularly infrastructure-related sectors, could benefit, while stronger tariffs would weigh on export-driven companies.

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