China's Communist Party Politburo telegraphed a fresh 2 trillion yuan ($278 billion) stimulus package on Saturday, the strongest signal in 14 months that Beijing intends to short-circuit a deepening property market malaise. Second quarter housing sales among the top 100 developers contracted 18.4% year-on-year through April 24, the steepest drop in eight months and well below the 7% decline expected by analysts polled by Wind Info.
The communique, released after a one-day meeting chaired by President Xi Jinping, called for "decisive measures to stabilize property and broaden domestic demand," language that economists at Macquarie and Goldman Sachs flagged as the most aggressive policy posture since the Q4 2024 stimulus announcement. The Politburo also approved an expansion of the consumer goods trade-in subsidy program from 300 billion yuan to 580 billion yuan for the full year.
Hong Kong Stocks Set to Rally Monday
Hang Seng futures gained 2.8% in Sunday electronic trading, while the Hang Seng China Enterprises Index futures advanced 3.4%. Property developer shares are expected to lead the surge, with offshore-listed China Vanke and Longfor Group indicated 8–12% higher. KraneShares CSI China Internet ETF (KWEB) gained 3.9% in U.S. pre-market.
Yuan also strengthened. Offshore CNH gained 0.6% to 7.18 per dollar, the firmest since late January. The People's Bank of China is widely expected to lower the seven-day reverse repo rate by 10 basis points at its next operation, with another 20 basis points of easing seen by year-end.
Commodity Demand Implications
Iron ore futures on the Singapore Exchange jumped 4.6% to $128.40 per tonne in Sunday trading, while Shanghai copper added 2.8% to 78,200 yuan per tonne. The China stimulus pivot offset some of the Iran de-escalation downside seen in oil and gold. BHP Group (BHP), Rio