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Hong Kong – Chinese and Hong Kong stocks surged on Tuesday after leaders’ remarks in Beijing He promised new measures to boost the stagnating country’s economy.

The domestic yuan rose as much as 0.6 percent, while dollar bonds of Chinese builders also rose.

Data in recent months have shown sluggish growth and slowing business activity, putting pressure on the Chinese government to provide much-needed help. Especially for the vast real estate sector.

Despite a spate of announcements and small rate cuts, investors have been deeply disappointed by the authorities’ policy response, with few concrete steps revealed.

But leaders on Monday hinted at renewed efforts to get the post-coronavirus recovery back on track, especially in the troubled real estate sector that dominates the world’s second-largest economy.

After the meeting, the 24-member Politburo recognized that “current economic operations are facing new difficulties and challenges” and agreed that it was necessary to “implement accurate and effective macroeconomic regulation, strengthen countercyclical regulation and liability reserves.”

The meeting, chaired by President Xi Jinping, also called for efforts to boost domestic consumption and “timely adjust and optimize real estate policies,” according to state broadcaster CCTV.

“The overall stance remains growth-oriented, but more forward-looking, with an emphasis on addressing structural challenges (i.e. local government debt) to foster long-term sustainable growth,” said Erin Xin, economist at HSBC Greater China.

He added that the announcement “retains a supportive tone and could help support the economic recovery to some extent, boosting market sentiment somewhat.”

While falling far short of the big spending plans seen in the past, the news gave investors a boost, with Hong Kong gaining more than 3% on the rise of real estate firms and tech giants.

“Investors now believe the Politburo meeting will create a reassuring atmosphere for more substantial and comprehensive policy easing ahead,” said Stephen Innes, managing partner at SPI Asset Management.

“Why is this time different? Because lawmakers have acknowledged the problem.

But Kiyong Song, chief Asia macro strategist at Societe Generale, added: “Overall, the Politburo fell short of the so-called ‘bazooka stimulus’.”

“Unless a series of strong and concrete measures are taken, we cannot expect a lasting impact on the market.” China and Hong Kong stocks rise as leaders pledge to boost economic aid

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