Broader Chinese Index Flat in 21st Century: Expert

China's stock market appeared to lose steam on Tuesday after rallying for a slew of Beijing's measures to prop up the economy. How will the rise and fall impact a broader economy in China? We spoke to Christopher Balding, a senior fellow at the Henry Jackson Society, for his take. Christopher Balding, thank you so much for joining us. Great to have you back on the show. Thanks for having me. Now, investors' optimism in China's stock market seems to be petering out. This is after a Tuesday morning conference by China's economic planner, a senior official saying that the central government will release a 100 billion yuan, around 14 billion USD investment plan for next year. What will this do for China's economy? Very little. I mean, part of this, when we're talking about the specific numbers, you have to remember at this point, China's economy is probably approaching about 150 trillion yuan size. So when we talk about, you know, a one trillion or something like that size of stimulus, that's really a very small number. And you also have to put that against the backdrop of a 60 trillion USD banking market. So these are actually very, very small numbers when we're talking hard stimulus. And to your point, last year, some influential Chinese market commentators were predicting or hoping that China would put in about 10 or over 10 trillion yuan investments. That's about 8 percent of China's GDP. That seemed to be rallying a lot of investors' hopes there. Given this smaller number that we just saw from today's press conference, what is that telling us about China's economic state? China's policymakers have been gripped by indecision and really not changing anything. So it's hard to say whether or not this is more reflective of the policymakers or the state of the economy. I think everybody at this point is in wide agreement that whatever the exact number is, the Chinese economy is much weaker than the official 5 percent growth number that they're continuing to publish. What it says about the broader economy, I think, is a very difficult inference to make. Now, Chinese stocks have been languishing since the pandemic, with the post-pandemic rebound never quite manifesting here. With these waves of stimulus, what do you see as the long-term impact on China's economy? I think you've already seen this in some stocks starting to drop. I think the short-term impact to this run-up in the stock market they've had over the past week or two is going to be very muted, and it's going to return to, let's say, the downward equilibrium that they've had over the past couple of years. We have to keep in mind that the broader Chinese index really, since the beginning of the century, is about flat. It's crazy to think of an entire stock index being flat, and we're almost a quarter of the way into the entire century. That's the reality. And it really is puzzling why Xi and Chinese policymakers in Beijing are so focused on boosting the stock market with these short-term measures that really have little impact on the broader economy. Christopher Balding, thank you so much for your time.