Investors and analysts believe that China is bracing for some unexpected moves. According to the Economic Times, the Chinese government is planning to deploy 2 trillion yuan ($283 billion) in fresh fiscal stimulus to bolster the national economy.
Bloomberg reports that China's Ministry of Finance is considering injecting a massive $283 billion into economic initiatives. Most economists expect the funding to come in the form of government bonds. "The stimulus should be multi-year and targeted to households and not restarting the real estate investment-led growth story. It is the focus of the stimulus rather than the size that is important," Pushan Dutt, professor of economics at INSEAD, said.
However, on October 11, the government did not mention any further measures to improve the economy's flagging growth. This in turn led to a sharp nosedive in Chinese stocks, making them the worst performers in the Asian region. The CSI300 index lost 2.4%, while the Shanghai Composite Index plunged by nearly 3%.
Meanwhile, markets in other parts of Asia, particularly Japan and South Korea, posted gains despite Wall Street's slump following stronger-than-expected US inflation data. Notably, these figures shifted investors' focus to the upcoming Federal Reserve meeting.
