Chinese stocks rose after China's top parliamentary body approved a 1 trillion yuan sovereign bond issuance to support the economy. This stimulus package aims to benefit industries where Beijing wants to replace old economic drivers [67a8ea17]. However, concerns remain over the impact of the bond issuance on economic growth. UBS economist Paul Donovan suggests that the rush to stimulate the economy may indicate concerns about growth momentum in 2024 or a worry that living standards are not as good as reported GDP figures imply [67a8ea17]. This comes as China's GDP growth target for the year is almost guaranteed at 5% [67a8ea17]. The issuance of additional sovereign debt will increase China's budget deficit in 2023 to around 3.8% of GDP, compared to the previously set 3% [67a8ea17]. This is the first time since 2000 that China has increased its budget deficit during the fiscal year and the fourth time in history that the country has issued special sovereign debt [67a8ea17]. Chinese automotive and infrastructure stocks stood out, rising 2.9% and 2.4% respectively [67a8ea17].
Cirrus Aircraft, a small plane company owned by a Chinese state-owned enterprise (SOE), has thrived in the US. However, with an IPO planned in Hong Kong, its future success is uncertain [be06f7c0].
In a move to challenge the duopoly held by Airbus and Boeing, Air China has announced plans to purchase 100 Comac C919 airliners valued at $10.8 billion. The deliveries of these homegrown airliners will begin this year and continue through 2031. The C919, which can seat a maximum of 192 passengers, has already received more than 1,000 orders from Chinese carriers and lessors. This agreement is a significant boost for Comac, the manufacturer of the C919, as it aims to disrupt the dominance of Airbus and Boeing in the aviation industry. Air China, one of China's three largest carriers, had previously placed orders for a few C919s, but this new order marks a major commitment to the homegrown aircraft [9a5e5919].