Finance

Deeproute.ai, a Chinese startup developing autonomous driving systems, announced a $100 million funding round Tuesday from an undisclosed automaker, while emphasizing close ties with chipmaker Nvidia.
Pitchbook data showed Chinese company Great Wall Motor led the investment.
The startup is also in “deep cooperation” with Nvidia, Maxwell Zhou, CEO of DeepRoute.ai, told reporters Tuesday in Mandarin, translated by CNBC.

A car with autonomous driving system by Alibaba-backed DeepRoute.ai, drives on a street in Shenzhen, Guangdong province, China July 27, 2022. 
David Kirton | Reuters

BEIJING — Deeproute.ai, a Chinese startup developing autonomous driving systems, announced a $100 million funding round Tuesday from an undisclosed automaker, while emphasizing close ties with chipmaker Nvidia.
Pitchbook data showed Chinese company Great Wall Motor led the investment.

It’s been difficult to obtain financing, especially from a non-government source, Maxwell Zhou, CEO of DeepRoute.ai, told reporters Tuesday in Mandarin, translated by CNBC.
The startup is also in “deep cooperation” with Nvidia, Zhou said, noting “in-depth discussions” with the chipmaker’s CEO Jensen Huang.
Zhou spoke on “Commercializing mass-produced autonomous driving solutions” at Nvidia’s closely watched GTC AI conference in March.

Shenzhen-based Deeproute said it uses Nvidia’s Orin chip for its current driver-assist system.
The startup added it is part of the first batch of companies in China to obtain Nvidia’s newer Thor chip for cars and will release a new system using it next year that can use more visual cues to manage more complex driving scenarios.

“Lots of companies in China are competing on autonomous driving. It is actually a competition over AI,” Zhou said.
In terms of AI computing power, Deeproute said it has its own capacity, and can tap Alibaba’s if needed. The e-commerce and cloud computing company led a $300 million investment round in Deeproute in 2021, giving it a valuation of more than $1 billion just two years after it was founded in 2019, according to the startup.
The U.S. in October 2022 imposed sweeping restrictions on China’s ability to access the most advanced semiconductors from Nvidia and other American companies. Automotive chips don’t currently fall in that category.
Nvidia is scheduled to release earnings for the quarter ended Oct. 27 on Nov. 20. For the quarter ended July 28, the chipmaker said its automotive segment saw revenue rise by 37% year-on-year to $345 million.

Eyes on Japan

Deeproute currently works with Chinese automakers selling in China. The company expects at least three car models using its driver-assist system will hit the road this year.
Already, Deeproute’s systems are running in more than 20,000 cars on the road, Zhou said. He expects that number to increase, potentially by ten-fold, next year.
The startup, which has an office in California, said it is looking to work with foreign automakers and plans to participate in Japan’s auto show next year.

Tesla competition

Deeproute has focused on using artificial intelligence to automatically drive cars, without relying on “high-definition maps.” That allows a vehicle to use driver assist tech on roads where those technical parameters haven’t been created.
It’s a trend car tech companies such as Xpeng and Huawei are pursuing — and Tesla’s strategy for developing autonomous driving. Elon Musk’s car company has focused on using cameras and artificial intelligence to steer the vehicle, without heavy reliance on HD maps.
Those maps, used by autonomous driving companies such as Alphabet’s Waymo, give a car a detailed picture of city streets. But they need to be created before a car runs on the road, a process that can drive up costs.
Zhou said the company is very eager for Tesla’s driver-assist product — called “Full Self-Driving” — to enter China. His reasoning is that Tesla’s product will encourage more consumers to become more interested in driver-assist features — and boost Deeproute’s prominence in the sector.
When asked about IPO plans, Zhou said the startup would keep to its own development pace, but it welcomed the latest public offerings of other industry players.
Chinese autonomous driving software developer WeRide went public on the Nasdaq last month, while robotaxi operator Pony.ai has filed for a U.S. IPO.

Industry focus on driver-assist

Companies in China’s autos industry are increasingly looking at driver-assist tech as a way to stay competitive in the market.
Pony.ai announced Saturday an agreement to cooperate on mass-development of fully autonomous robotaxis with state-owned Beijing Automotive Group’s new energy vehicle subsidiary.
Tencent on Monday announced it extended its strategic cooperation with German autos supplier Bosch to work on autonomous driving and tech-enabled cockpits. The two companies first agreed to strategic cooperation in 2020.
Clarification: This story has been updated to reflect that Deeproute was part of the first batch of companies in China to obtain Nvidia’s new Thor chip for cars. More

Chinese home appliance company Hisense aims to become the No. 1 seller of television sets in the U.S. in about two years, Catherine Fang, president of Hisense International, told CNBC in an exclusive interview Monday.
In its bid to boost its brand in the U.S., the company last week became the first official partner of the FIFA Club World Cup that’ll kick off in Miami in June 2025.
Hisense ranked second by North America market share for TV set shipments, behind Samsung, according to Counterpoint data for the second quarter.

TV screens show global hit video game “Black Myth: Wukong” at Hisense booth during the IFA Berlin 2024 on September 6, 2024 in Berlin, Germany.
China News Service | China News Service | Getty Images

BEIJING — Chinese home appliance company Hisense aims to become the No. 1 seller of television sets in the U.S. in about two years, Catherine Fang, president of Hisense International, told CNBC in an exclusive interview Monday.
In its bid to boost its brand in the U.S., the company last week became the first official partner of the FIFA Club World Cup that’ll kick off in Miami in June 2025. FIFA President Gianni Infantino, FIFA Secretary General Mattias Grafström, and Hisense Group Chairman Jia Shaoqian attended an event in Shanghai on Oct. 30 to mark the partnership.

“We hope through this sponsorship we can increase our market share,” Fang said in Mandarin, translated by CNBC. Sports events can burnish Hisense’s image as a premium brand, she added.
The company’s newest TVs use an in-house artificial intelligence chip to improve image rendering, Fang said, noting plans to increase the use of AI for improving audio quality, or providing athlete stats via voice command. The company was not immediately able to share to what extent those features were available on TV sets in the U.S.
Hisense’s 55-inch U8 TV series starts at around $700 in the U.S., while the 100-inch version costs around $3,000 or more.

In the second quarter, the company shipped the second highest number of TV sets in North America, behind Samsung, according to research firm Counterpoint.
“Hisense and TCL, which have been focusing on normal LCD TVs, are trying to increase their market share by strengthening their advanced TV portfolios such as QD-LCD and Mini LED LCD,” Counterpoint said.

Hisense also sells home appliances such as refrigerators and washing machines, often called white goods.
Fang said the company aims to become the top Chinese brand of such white goods in North America, also in roughly the next two years.
While China-based companies have been eyeing overseas markets relatively recently as growth at home slows, Hisense has built up its global business over several decades.
Hisense generates half of its revenue outside China, with North America accounting for about 30% of its overseas sales, Fang said. More

A closely watched meeting of China’s parliament on Monday reviewed a proposal to raise the local government debt limit, according to state media.
New debt would go toward replacing hidden debt, the report said, noting that Finance Minister Lan Fo’an spoke at the meeting on the plan.
The standing committee of China’s National People’s Congress is meeting this week and widely expected to approve further fiscal support for the country’s slowing economy.

A Chinese flag flutters on top of the Great Hall of the People ahead of the opening ceremony of the Belt and Road Forum (BRF), to mark 10th anniversary of the Belt and Road Initiative, in Beijing, China October 18, 2023.
Edgar Su | Reuters

BEIJING — A closely watched meeting of China’s parliament standing committee on Monday reviewed a proposal to raise the local government debt limit, according to state media.
New debt would go toward replacing hidden debt, the report said, noting that Finance Minister Lan Fo’an spoke at the meeting on the plan.

Lan indicated at a press conference last month that an increase in the local debt limit was in the works. Local authorities in China have historically been responsible for much of public services spending, but have struggled financially as revenue from land sales to developers has dropped.
China has about 50 trillion yuan to 60 trillion yuan (about $7 trillion to $8.45 trillion) in outstanding hidden debt, according to Ting Lu, chief China economist at Nomura.

In a report Friday he estimated about 10 trillion yuan in additional debt quota could be approved over the next few years to swap out part of the hidden debt.
“Beijing might eventually raise the debt swap to RMB15trn, if China’s economy faces even bigger challenges,” Lu said.
The standing committee of China’s National People’s Congress is meeting this week and widely expected to approve further fiscal support for the country’s slowing economy. Committee Chair Zhao Leji is leading the gathering, scheduled to wrap up Friday. More

Traders work on the floor at the New York Stock Exchange on Oct. 24, 2024.
Brendan McDermid | Reuters

Stocks typically rise after a presidential election, but investors need to be prepared for some short-term choppiness first, history shows.
The three major benchmarks on average have seen gains between Election Day and year-end in the presidential election year going back to 1980, according to CNBC data. However, investors should not be expecting a straight shot up in the market after polls close.

The S&P 500 after the election

Election Date
Day After
Week After
Month Later
Year End

11/3/2020
2.20%
5.23%
8.83%
11.48%

11/8/2016
1.11%
1.91%
4.98%
4.64%

11/6/2012
-2.37%
-3.77%
-1.01%
-0.15%

11/4/2008
-5.27%
-10.62%
-15.96%
-10.19%

11/2/2004
1.12%
2.97%
5.29%
7.20%

11/7/2000
-1.58%
-3.42%
-6.17%
-7.79%

11/5/1996
1.46%
2.16%
4.23%
3.72%

11/3/1992
-0.67%
-0.31%
2.38%
3.76%

11/8/1988
-0.66%
-2.48%
0.52%
0.93%

11/6/1984
-0.73%
-2.61%
-4.49%
-1.86%

11/4/1980
2.12%
1.72%
5.77%
5.21%

Average
-0.30%
-0.84%
0.40%
1.54%

Median
-0.66%
-0.31%
2.38%
3.72%

Source: CNBC

In fact, the three indexes have all averaged declines in the session and week following those voting days. Stocks have tended to erase most or all of those losses within a month, CNBC data shows.
This means investors should not be anticipating an immediate pop on Wednesday or the next few days after.

The Dow after the election

Election Date
Day After
Week After
Month Later
Year End

11/3/2020
1.34%
7.06%
9.06%
11.38%

11/8/2016
1.40%
3.22%
6.99%
7.80%

11/6/2012
-2.36%
-3.70%
-1.30%
-1.07%

11/4/2008
-5.05%
-9.68%
-12.98%
-8.82%

11/2/2004
1.01%
3.49%
5.47%
7.45%

11/7/2000
-0.41%
-2.48%
-3.06%
-1.51%

11/5/1996
1.59%
3.04%
5.85%
6.04%

11/3/1992
-0.91%
-0.83%
0.74%
1.50%

11/8/1988
-0.43%
-2.37%
0.67%
1.93%

11/6/1984
-0.88%
-3.02%
-5.92%
-2.62%

11/4/1980
1.70%
0.73%
3.55%
2.86%

Average
-0.27%
-0.41%
0.83%
2.27%

Median
-0.41%
-0.83%
0.74%
1.93%

Source: CNBC

That is especially true given the chance that the presidential race, which is considered neck-and-neck, may not be called by Wednesday morning. America may also need to wait for close Congressional races to have final counts for determining which party has control of either house.

The Nasdaq Composite after the election

Election Day
Day After
Week After
Month Later
Year End

11/3/2020
3.85%
3.52%
10.90%
15.48%

11/8/2016
1.11%
1.58%
4.31%
3.65%

11/6/2012
-2.48%
-4.25%
-0.75%
0.25%

11/4/2008
-5.53%
-11.19%
-18.79%
-11.41%

11/2/2004
0.98%
2.95%
8.00%
9.61%

11/7/2000
-5.39%
-8.12%
-19.41%
-27.67%

11/5/1996
1.34%
2.23%
5.78%
5.04%

11/3/1992
0.16%
3.83%
8.56%
11.97%

11/8/1988
-0.29%
-1.77%
-0.96%
0.67%

11/6/1984
-0.32%
-1.08%
-4.58%
-1.27%

11/4/1980
1.49%
0.97%
6.75%
4.76%

Average
-0.46%
-1.03%
-0.02%
1.01%

Median
0.16%
0.97%
4.31%
3.65%

Source: CNBC

The “election is now center stage as the next catalyst for financial markets,” said Amy Ho, executive director of strategic research at JPMorgan. “We caution that uncertainty could linger on the outcome as the timeline for certifying election results could take days for the presidential race and weeks for the House races.”
This election comes amid a strong year for stocks that has pushed the broader market to all-time highs. With a gain of about 20%, 2024 has seen the best first 10 months of a presidential election year since 1936, according to Bespoke Investment Group.

Don’t miss these insights from CNBC PRO More

Early indicators of China’s biggest shopping event of the year reveal a pickup in select categories amid expectations of modest growth in overall sales.
“What we’re seeing so far, it’s going to be slightly better in terms of GMV growth over last year,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, said in an interview Thursday.
“Sentiment is quite different this year, much calmer,” wrote Ashley Dudarenok, founder of ChoZan, a China marketing consultancy. “Chinese consumers are not caught up in the ‘buy buy buy frenzy,’ they are hunting [for] more expensive products that they actually need vs just lower prices.”

Employees package and sort express parcels at an e-commerce company on Nov. 1, 2024, around the Double 11 Shopping Festival in Lianyungang, Jiangsu Province of China.
Vcg | Visual China Group | Getty Images

BEIJING — Early indicators of China’s biggest shopping event of the year reveal a pickup in select categories amid expectations of relatively modest growth in overall sales.
China’s version of Black Friday kicked off on Oct. 14, more than a week earlier than last year, as e-commerce players Alibaba and JD.com grapple with tepid consumer spending. The shopping festival, also known as Singles Day or 11.11, has in recent years evolved into a weeks-long promotional period since Alibaba launched it in 2008 on Nov. 11.

“What we’re seeing so far, it’s going to be slightly better in terms of GMV growth over last year,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC Thursday. The company helps foreign brands — such as Vitamix and IS Clinical — sell online in China and other parts of Asia.
GMV refers to gross merchandise value, an industry measure of sales over time. China’s e-commerce giants stopped reporting Singles Day GMV in 2022 during the pandemic. In 2021, Alibaba said its GMV rose by 8% while JD’s climbed by 28%, totaling more than $139 billion.
Singles Day GMV this year as of Oct. 30 was 845 billion yuan ($119.1 billion), according to research firm Syntun. It was not clear how the GMV figures compared to 2023 given the extended promotional period this year.
Around 80%, or roughly $95 billion, came from Alibaba, JD.com and PDD, while nearly 20% was generated via livestreaming sales platforms Kuaishou and ByteDance’s Douyin, the Syntun report showed.

While Singles Day GMV no longer grows by 30%, Cooke said he expects around 15% growth this year, better than the 11% increase in 2023, when the festival lasted for 19 days, according to his company’s data.

“Things that are experiential-based are starting to do really well, less on the Louis Vuitton luxury and more on the lululemon is kind of what we’ve said about this for a while,” Cooke said. “It’s just that consumer habits have really changed.”

Subsidies boost appliances

Helping boost sales this Singles Day are China’s subsidies for trade-ins of home appliances, launched in late July. Chinese authorities since late September have started doubling down on stimulus efforts by cutting rates on existing mortgages and signaling further support.
“We believe [the] 11.11 festival this year will be a critical point and is poised to reflect on the recovery trajectory in 3Q24 and 4Q24,” analysts at UOB Kay Hian said in a report.
They predict 4% to 5% growth in Singles Day GMV, with sales in the home appliance category supported by the trade-in program.
Alibaba said government subsidies and platform benefits contributed to a more than seven-fold surge in presales of home appliances during the first hour on Oct. 14, compared with the first hour of presales last year.
JD.com said that between Oct. 14 and Oct. 31, transaction volume grew by double-digits versus the same period a year ago. The company claimed record sales in consumer electronics and home appliances, without disclosing figures.
“This year, it seems that the price war of e-commerce platforms has slowed down overall, returning to a certain degree of rationality after the intense price competition,” Dave Xie, partner at Oliver Wyman, said in a statement. He also noted Beijing’s stimulus announcements and a recovery in consumer sentiment.
“In the initial phase of Singles Day, categories such as home appliances and consumer electronics, outdoor gear, beauty and cosmetics, and pet supplies have all performed well,” Xie said.

‘Micro’ shopping trend

A consumer trend that’s emerged this year is in toys and collectibles, often from a game or popular animated series. The category is usually referred to as IP in China.
”A lot of international brands have been fighting for licenses to try to get in here and do this as well,” Cooke said.
There’s always “a micro trend in every year’s 11.11 and this really seems to be it this year,” he said. “Something that kind of came out of nowhere, into all of a sudden really, really big numbers.”
More than 100,000 products based on licenses for over 1,000 characters — such as the games Genshin Impact and Arknights — are being launched on Alibaba’s Tmall this Singles Day, according to Yuke Liang, a representative for the business’ designer and collectable toy category. Products include collectable cards, figurines and clothes.
The category also includes Lego and British toy company Jellycat, which launched a Valentine’s Day plush dog in China for Singles Day, Liang said. The 7,000 dogs, priced at around $50 each, sold out in seconds, she said.
Japanese manga Chiikawa opened a Tmall store in late September, and saw more than 100,000 shoppers simultaneously order a $9.72 limited edition plush, Liang said.
Liang said Taobao and Tmall started developing the IP category in 2017, and elevated it in 2021 to one of its few tier-one segments in terms of product promotion and business priority. She said most buyers are in their early thirties or younger, and prefer to spend on products perceived as bringing happiness or other emotional satisfaction.

Sentiment is ‘much calmer’

Despite such pockets of growth, China’s Singles Day remains more toned down than in prior years.
“Sentiment is quite different this year, much calmer,” wrote Ashley Dudarenok, founder of ChoZan, a China marketing consultancy. “Chinese consumers are not caught up in the ‘buy buy buy frenzy,’ they are hunting [for] more expensive products that they actually need vs just lower prices.”
She expects that at best, Singles Day this year may be “slightly better” and driven by different categories.
The shopping promotions officially wrap up on Nov. 11.
James Yang, head of Greater China retail at consultancy Bain & Company, said the firm has “muted expectations” for Singles Day this year, continuing the trend of the last two years.
JD is set to release quarterly results on Nov. 14, while Alibaba is scheduled to release earnings on Nov. 15. More

Affirm, the U.S. buy now, pay later firm, on Monday launched its services in the U.K. — its first expansion overseas.
Max Levchin, CEO of Affirm, told CNBC the company is seeing a lot of demand from merchants in Britain.
Affirm’s arrival in the U.K. comes as the government is consulting on plans to regulate the buy now, pay later industry.

PayPal Inc. co-founder and Affirm’s CEO Max Levchin on center stage during day one of Collision 2019 at Enercare Center in Toronto, Canada.
Vaughn Ridley | Sportsfile | Getty Images

LONDON — Buy now, pay later firm Affirm launched Monday its installment loans in the U.K., in the company’s first expansion overseas.
Founded in 2012, Affirm is an American fintech firm that offers flexible pay-over-time payment options. The company says it underwrites every individual transaction before making a lending decision, and doesn’t charge any late fees.

Affirm, which is authorised by the Financial Conduct Authority, said its U.K. offering will include interest-free and interest-bearing monthly payment options. Interest on its plans will be fixed and calculated on the original principal amount, meaning it won’t increase or compound.
The company’s expansion to the U.K. marks the first time it is launching in a market outside the U.S. and Canada. Globally, Affirm counts over 50 million users and more than 300,000 active merchants, including Amazon, Shopify and Walmart.
Among the first merchants offering Affirm as a payment method in the U.K. are Alternative Airlines, the flight booking website, and payments processing firm Fexco. Affirm said it expects to onboard more brands over the coming months.
Max Levchin, CEO of Affirm, told CNBC that the company had been working on its launch in the U.K. for over a year. The reason Affirm chose Britain as its first overseas expansion target was because it saw a lot of demand from merchants in the country, according to Levchin.
“It is a huge market, it’s English-speaking,” making it a great fit for the business, Levchin said in an interview last week ahead of Affirm’s U.K. launch. Affirm will eventually expand into other markets that aren’t English-speaking but this will take more work, he added.

“There are lots of competitors here who are doing a sensible job serving the market. But when we started doing merchant outreach, just to find out locally, is the market saturated? Does everybody feel well served?” Levchin said. “We got such an enormous amount of market pull. It kind of sealed the deal for us.”

Fierce competition

Competition is fierce in the U.K. financial technology space. In the buy now, pay later segment Affirm focuses on, the company will find no shortage of competition in the form of sizable players like Klarna, Block’s Clearpay, Zilch, and PayPal, which entered the BNPL market in 2020.
Where Affirm differs to some of those players, according to Levchin, is that its range of financing products offer customers the ability to pay purchases off over much lengthier periods. For example, Affirm offers payment programs that last as long as 36 months.
Affirm’s launch in the U.K. comes as the government is consulting on plans to regulate the buy now, pay later industry.
Among the key measures the government is considering, is plans to require BNPL providers to provide clear information to consumers, ensure people aren’t paying more than they can afford, and give customers rights for when issues arise.
“Generally speaking, we welcome regulation that is thoughtful, that pushes the work onto the market to do the right thing, but also knows how not to be too cumbersome on the end-customer,” Levchin said.
“Telling us do lots of work in the background before you lend money is great. We’re very good at automating. We’re very good at writing software. We’ll go do the work,” he added. “Pushing the onus on the consumer is dangerous.”
Affirm secured authorization from the Financial Conduct Authority, the country’s financial services watchdog, after months of discussions with the regulator, Levchin said. He added that the firm’s “pristine reputation” helped.
“We’ve never charged a penny of late fees. We don’t do deferred interest. We don’t do any sort of the anti-consumer stuff people struggle with,” Levchin told CNBC. “So we have this good, untarnished reputation of being just very thoughtfully pro-consumer. And merchants love that.” More

Investors expect details on China’s fiscal stimulus plans be come out Friday, after Beijing considers the U.S. presidential election earlier in the week.
“The size of China’s fiscal stimulus package would be around 10~20% bigger under a Trump win than under the scenario of a Harris win,” Ting Lu, chief China economist at Nomura, said in a note.
Liqian Ren, leader of quantitative investment at WisdomTree, expects the scale of Beijing’s stimulus will be determined not by who wins the election, but the stock market reaction.

A flag stall at the Yiwu Wholesale Market in Zhejiang province, China, on May 10, 2019.
Aly Song | Reuters

BEIJING — The size of China’s highly anticipated stimulus plans will likely depend on the outcome of the U.S. presidential election, analysts said.
Investors expect Beijing to announce details on fiscal support Friday. That’s when the standing committee of the National People’s Congress — China’s parliament — is due to wrap up a five-day meeting. The same gathering last year oversaw a rare increase in the fiscal deficit.

This year, the meeting’s timing means any details will be out just days after the U.S. has voted Republican nominee Donald Trump or Democrat rival Kamala Harris in as the next president. Polls are set to close Tuesday local time.
“The size of China’s fiscal stimulus package would be around 10~20% bigger under a Trump win than under the scenario of a Harris win,” Ting Lu, chief China economist at Nomura, said in a note last week.
He cautioned that most of China’s challenges are domestic, though there will be some impact from the U.S. election result.

Trump has threatened to raise tariffs on U.S. imports from China by 60% — or reportedly by even 200% in an extreme scenario. Harris, currently vice president, has not yet signaled a major departure from the Biden administration’s approach of restricting China’s access to advanced technology.
More tariffs would hit China’s exports, a bright spot in an economy grappling with a real estate slump and tepid consumer demand.

Increased trade restrictions would require China to rely more on domestic demand to boost growth, Zhu Bin, chief economist of Nanhua Futures, said in a video presentation last week. That’s according to a CNBC translation of his Mandarin-language comments.
“Without question we can be certain of one thing — if Trump wins the election, China’s domestic stimulus will only be larger, not smaller,” Zhu said. He expects Trump has a greater chance of winning, which he said would increase downward pressure on the Chinese yuan versus the U.S. dollar.
Political analysts debate whether China’s relations with the U.S. would be better under Trump or Harris.
“I think at this point, probably from China’s view, a potential president Harris [makes it] easier to expect what policies likely come,” said Liqian Ren, leader of quantitative investment at WisdomTree.
That doesn’t mean Beijing will embark on large-scale support. Chinese authorities are “constrained by the U.S.-China competition, so the priority number one is to be able to upgrade technology across the board,” She said. “I think as long as that’s your goal then the government’s willingness to stimulate is still going to be lukewarm.”
Ren expects the scale of stimulus will be determined not by who wins the election, but the stock market reaction.
Market volatility in China, but not the United states, is likely to make “China feel more obligated to counter this volatility,” she said. In contrast to three or four years ago, Ren said, Chinese stock market volatility today has a greater impact on economic confidence.
Chinese stocks have tempered their gains in recent weeks after surging in late September. Chinese President Xi Jinping on Sept. 26 led a high-level meeting calling for strengthening fiscal and monetary policy support, and halting the decline in real estate.
While the People’s Bank of China has cut interest rates, the Ministry of Finance has yet to release details on widely anticipated fiscal stimulus. Finance Minister Lan Fo’an last month hinted at an increase in the deficit, and indicated any changes needed to undergo an approval process before being announced.

How large？

Analyst forecasts for additional debt issuance vary. China is considering more than 10 trillion yuan in debt issuance over a few years, Reuters reported Tuesday, citing sources.
Chinese authorities may not announce a specific number, but if they do, it should be more than 4 trillion yuan, given that was the amount issued in the wake of the 2008 financial crisis, said Zong Liang, chief researcher at Bank of China. He expects the deficit could be expanded beyond 4%.
The Chinese government set a deficit target of 3% for this year, after increasing it to 3.8% late last year.
WisdomTree’s Ren said her analysis of official statements, media reports and investment notes revealed that stimulus expectations are inherently about the same. Whether it is 10 trillion yuan over three to five years, or 2 trillion yuan in one year, the average is about 2 trillion yuan in support a year, she pointed out.

Consumption still in question

“I think people right now are focusing a lot on the topline number,” Ren said. “But they are missing [how] the local government, they are doing a lot of things that are actually counter[ing] stimulus.”
She noted how local authorities have so strictly enforced tax collection in some areas that they have discouraged business activity. Despite some central government support, she said, she expects it will “probably be quite a while” before local authorities “feel they have the cash to spend.”
Dozens of companies in China this year disclosed in stock exchange filings that they have received notices from local authorities to pay back taxes tied to operations as far back as 1994. Local governments once relied on land sales to real estate developers for revenue.
The finance ministry has emphasized its focus on addressing local government debt problems. Analysts have pointed out how additional stimulus will also likely go toward banks, not direct handouts to consumers.
Consumption stimulus may come more from property support at this stage, Citi analysts said in a report Friday. “Having said that, we believe more decisive consumption support could still be a realistic option under more adverse tariff scenarios.” More

Political risk—the notion that an election might have a meaningful impact on financial markets—used to be something that was the concern of emerging-market investors. Those in rich countries paid attention to central bankers, rather than politicians. Things are a little different today. In the run-up to America’s presidential election on November 5th, asset prices have moved alongside polling averages. Wall Street hums with talk of the “Trump trade”. More