Will China’s epic spend be enough?

China’s relentless economic growth used to be the marvel of the world. Oh, what a memory.

The past couple of years have seen China contend with an economic slowdown amid colliding crises, many of which make it internationally unique. Consumer prices have been approaching deflationary territory, there’s an oversupply of housing, and youth unemployment has soared.

Mounting pressure has forced the Chinese government to step in. Over the past month, Beijing has put forward a set of significant economic stimulus measures aimed at reviving China’s faltering economy.

According to a research note by Deutsche Bank, this stimulus could potentially become “the largest in history” in nominal terms. But there’s still a lot we don’t know. So what kinds of measures that are in this package so far, and has China been here before?

What’s in the package?

On September 24, Pan Gongsheng, governor of China’s central bank, unveiled the country’s boldest intervention to boost its economy since the pandemic.

The initiatives included reducing mortgage rates for existing homes and reducing the amount of cash commercial banks are required to hold in reserves. The latter is expected to inject about 1 trillion yuan (US$140.5 billion) into the financial market by letting the banks lend out more.

On top of this, 800 billion yuan was announced to strengthen China’s capital market.

This comprised a new 500 billion yuan monetary policy facility to help institutions more easily access funds to buy stocks, and a 300 billion yuan re-lending facility to help speed up sales of unsold housing.

Further signs of economic revitalization became evident at a Politburo meeting of China’s top government officials two days after this announcement.

Chinese President Xi