China's government just can't help itself. The State Council intends to accelerate construction projects and enact other measures in order to expand domestic demand and stabilize growth.
The plan comes amid data which suggests that the economy is softening. However, it also contrasts with noises from China's leadership that it's prepared to tolerate slower growth in order to enact reform that would shift the economy away from heavy industry and towards consumption.
Meanwhile, foreign money entering China plummeted to a five-month low of $21.1B in February from $72.3B in January. The plunge suggests that the government's attempts to discourage speculation on yuan appreciation by forcing the currency to fall may be enjoying initial success. The inflows of hot money can be a problem, as they can inflate asset prices.
The Shanghai Composite is -0.3%, while the USD-CNY is +0.4% at 6.219 yuan.
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