China Shifts to Moderately Loose Monetary Policy

China's Communist Party has announced a shift to a 'moderately loose' monetary policy to stimulate its slowing economy and combat deflation, marking the first such change since 2009. This decision precedes the Central Economic Work Conference and includes calls for more proactive fiscal policies and extraordinary countercyclical adjustments. The announcement has led to drops in bond yields and increases in stock prices, especially for Australian mining companies anticipating higher demand for commodities. Concurrently, the 2024 Understanding China International Conference highlighted the significance of global cooperation and understanding China's modernization efforts, emphasizing a blend of tradition and innovation in its development model. Additionally, the Working Mechanism for Consultation and Coordination (WMCC) has convened to tackle the India-China border disputes, marking a potential thaw in relations after years of tension. While Schroder AsiaPacific cautiously backs China's recovery, investors remain optimistic about broader market trends.