Liquidity measures excite market, boost confidence in China's economic trajectory: expert

The announcement of cheaper liquidity for brokers on an "almost unlimited" basis has been key to driving up the country's stock prices in recent days, according to an investment economist.

China's central bank, the People's Bank of China (PBOC), cut the reserve requirement ratio by 0.5 percentage points for financial institutions and lowered the interest rate of seven-day reverse repos by 20 basis points on Friday.

The interest rate of seven-day reverse repos, a key short-term policy rate, was lowered from 1.7 percent to 1.5 percent on Friday, according to the central bank. This drop is the largest in nearly four years.

The central bank will establish a swap program for securities, funds and insurance companies to obtain liquidity from the central bank through asset collateralization.

Hao Hong, chief economist of Grow Investment, offered his breakdown of the announcement and highlighted the market response amid a surge in the country's A-share stocks, which skyrocketed 8.5 percent on Monday.

"We are seeing a combo of policy announcements that's coming our way. For example, the PBOC is going to give the swap facility for brokers and some insurance companies to pledge their treasury holdings and get low-interest loans to buy stocks, and also a rediscount lending facility for companies to do stock repurchase as well. Also, there's a forward guidance in the policy announcement. The PBOC actually said two parts will be cut again in the coming months. And also if the initial 500 billion swap facility is not enough, then there will be another 500 billion and more that is available," he explained.

"Effectively, the PBOC's saying that cheap liquidity is available and it's almost an unlimited tab. So I think that really got the market excited," the economist added.

The initial scale of the swap program will be set at 500 billion yuan (about 71 billion U.S. dollars), with possible expansions in the future, according to Pan Gongsheng, governor of the PBOC at a press conference.

Liquidity measures excite market, boost confidence in China's economic trajectory: expert

A special event featuring a large-scale youth chorus was held at an art park in the Hong Kong Special Administrative Region (SAR) on Monday to mark the 75th anniversary of the founding of the People's Republic of China (PRC), which falls on Oct 1.

Taking place at the Art Park of West Kowloon Cultural District (WestK), the "Celebration of National Day – The Next Generation Chorus Performance" drew some 1,000 students and youth group members to take part in the singing of patriotic songs.

Among the performers was the Senior Mixed Voice Choir from St. Paul's Co-educational College, which recently won two gold medals at an international competition in New Zealand.

Although a record-breaking drone show, which was set to feature 2,099 drones, had to be canceled due to technical difficulties, the performances proceeded without interruption. The number 2,099 had been chosen to symbolically represent the year 2024 and the 75th anniversary, as the sum of 2024 and 75 equals 2,099. At present, residents in Hong Kong still have the highly anticipated fireworks display to look forward to on Tuesday.

To further engage the public in the celebrations and stimulate local consumption, a variety of offers and freebies covering public transport, culture, arts, leisure activities, dining and retail are available, encouraging hands-on participation in the National Day festivities.

The event was organized by the Tourism Commission of the Culture, Sports and Tourism Bureau of the Hong Kong SAR.

Youth chorus performances staged in Hong Kong to mark 75th founding anniversary of PRC