China isn't planning a ‘bazooka’ stimulus—at least not this year

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Subscribe to enjoy similar stories. With scant detail on how Beijing aims to stimulate its way out of its economic downturn, some investors have speculated that the U.S. presidential election might prompt the big “bazooka" markets have hoped for.

According to people involved in policy discussions, that is wishful thinking: A bazooka isn’t coming—at least not this year. Hopes rose for bolder stimulus action when a key Chinese legislative session was postponed until this week. Some investors and analysts viewed it as a sign that Chinese leader Xi Jinping was waiting for U.S.

election results to potentially adjust his stimulus plan—especially if Donald Trump, who has pledged sweeping tariffs on Chinese products, looked set to return to the White House. The people involved in policy discussions say that scheduling issues involving some participants in the legislative meeting caused the delay. While the U.S.’s approach to China in the next four years will likely affect the country’s economic trajectory, they say, the key planks of the stimulus package aimed for the remainder of this year have been set, with the plan awaiting only formal approval at the legislative meeting.

However, these people say, Beijing is discussing how the U.S. election’s potential impact will affect market sentiment in China. They say that authorities are planning on signaling after the legislative session that more steps to support growth are in the pipeline and that a package of incremental measures can be expanded depending on an assessment of risks to the Chinese economy.