What's Going On With US Listed Chinese Stocks Like Alibaba, JD, Nio, Li On Wednesday?

China is considering a substantial fiscal initiative next week to boost its slowing economy. It plans to approve over 10 trillion yuan ($1.4 trillion) in additional debt issuance.

The Standing Committee of the National People’s Congress (NPC) is set to decide on the measure, which includes 6 trillion yuan in special sovereign bonds to ease local government debt burdens, Reuters reports.

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Chinese stocks listed in the U.S., including Alibaba Group Holding BABA, JD.com, Inc JD, Baidu, Inc BIDU, NIO Inc NIO, Li Auto Inc LI, XPeng Inc XPEV are trading lower on Wednesday.

This legislative approval, expected on the final day of the NPC’s November 4-8 meeting, could signal a shift towards more significant economic stimulus, notably if Donald Trump, who vowed to intensify tariffs on Chinese goods, wins the upcoming U.S. election.

Beijing’s renewed stimulus efforts coincide with increased global scrutiny of China’s economic policies.

The government has implemented its most robust monetary measures since the 2020 pandemic and hinted at additional fiscal aid.

Analysts told Reuters the 10-trillion-yuan package indicates a more aggressive approach to shore up China’s economy but remains less extensive than the 2008 stimulus.

To ease local governments’ debt pressures, the NPC Standing Committee may also approve up to 4 trillion yuan in special-purpose bonds over five years, designated for land and property acquisitions.

If sanctioned in full, this move could raise the overall fiscal package to over 10 trillion yuan.

China’s central bank held its key policy rate steady in October, following September’s rate cuts aimed at boosting the economy. Last Friday, the People’s Bank of China (PBOC) injected 700 billion yuan ($98.36 billion) through its one-year medium-term lending facility, maintaining the rate at 2.0%.

In a separate move, the central bank added 292.6 billion yuan via a seven-day reverse repo at a steady 1.5% rate.

The latest easing cycle started in late September when the PBOC lowered the one-year MLF rate from 2.3% to 2.0% and cut the seven-day reverse repo rate by 20 basis points. Additionally, it reduced reserve requirements, releasing 1 trillion yuan for lending.

In response, China’s commercial banks reduced benchmark lending rates by 25 basis points to support the struggling property market.

Price Actions: BABA stock is down 0.85% at $98.98 at the last check on Wednesday. JD is down 2.11%, BIDU is down 0.99%, NIO is down 4.38%.

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