Tax cuts in China could be the center of Beijing's fiscal fight against an economic slowdown amid an ongoing trade spat with the U.S., experts said.
The People's Bank of China still has "a lot of space to ease" despite the constraints faced, says Tao Wang of UBS Investment Bank.
The Wall Street Journal reported that Treasury Secretary Steven Mnuchin proposed lifting all or some of the tariffs on China in order to advance trade discussions.
China's central bank pumped almost $83 billion into its banking system in a single day, which eased concerns over a potential funding squeeze in the economy ahead of a major festive season, analysts said.
The People's Bank of China's $83 billion stimulus into the financial system is its largest single-day injection. Alicia Garcia-Herrero of Natixis weighs in on what this move means.
U.S. government debt prices were lower on Wednesday as traders digested news of the defeat of U.K. Prime Minister Theresa May's Brexit deal.
The People's Bank of China on Wednesday pumped the most money ever into the banking system in one day, highlighting the stress the economy is facing.
Stocks rose on Wednesday as investors cheered strong quarterly earnings from major banks like Goldman Sachs and Bank of America.
On Monday, the Financial Times reported, citing two sources, that the People's Bank of China has not yet formally acknowledged applications from Visa and Mastercard to process yuan payments.
Chinese government data showed that December exports and imports fell unexpectedly, deepening concerns of a slowdown in the world's second-largest economy as Beijing's trade war with the U.S. appeared to be taking a toll.
Robin Xing of Morgan Stanley says China has begun to address structural issues in the U.S.-China trade war, and may be able to provide a "road map" that both parties can use to verify Beijing's progress by the March deadline.
"I do think China's economy warrants a little more aggressive easing than the government's come through so far," said Hannah Anderson, global market strategist at J.P. Morgan Asset Management.
The U.S. and China are set to hold trade negotiations at the vice ministerial level in Beijing on Monday and Tuesday.
The Shanghai composite ended the year Friday at 2,493.9, down nearly 25 percent for 2018 in its worst year since 2008.
"Monetary policy will remain prudent and won't be a 'flood.' Otherwise, funds will likely flow into the property sector again," Sheng Songcheng was quoted as saying by a state-backed newspaper.
William Ma of Noah Holdings in Hong Kong says he remains constructive on the China market in part due to policy support from the People's Bank of China and other government officials.
Asian markets have hit the bottom and will likely turn around in 2019 due to China's expansionary monetary policies to help spur economic growth, a Morgan Stanley strategist said on Thursday.
China's central bank left its short-term borrowing rates unchanged on Thursday, choosing not to follow its U.S. counterpart, which raised its benchmark rate just hours earlier.
The mainland Chinese markets were mixed on the day, with the Shanghai composite slipping 0.52 percent to close at about 2,536.27 and the Shenzhen composite recovering from earlier losses to end the trading day up by 0.202 percent at around 1,297.10.
William Rhodes of William R. Rhodes Global Advisors says he detects a "willingness" from the current Chinese government to move "more rapidly" on opening the economy and the financial sector.