There was much anticipation ahead of tonight speech by Chinese President Xi Jinping at the 40th Reforms Anniversary Event.
Hope was high for Xi to highlight potential new reform measures, growth initiatives, and - what the markets want most - moar stimulus.
He instead offered none of the above, choosing a propaganda-heavy discourse on the Communist Party's contributions to the success of China.
Main highlights include Xi pointing out that 1978 marked major turning point of far reaching significance and "China's stability makes it one of the safest nations in the world..." (except if you're a Canadian businessman)
China's had an average +9.5% growth for the past 40 years.
But warned that:
"China may face unimaginable difficulties ahead"
The speech was dominated by role of the party in developing modern China
Says the party has led China on a "soul stirring journey"
“China has demonstrated the vitality of scientific socialism with indisputable facts.”
There was no concrete message from Xi's speech either on the trade friction with the U.S. or growth prospects for 2019.
"No one is in a position to dictate to the Chinese people what should or should not be done,"
Xi likens China's current stage of development to swimming midstream in a river or climbing half way up a mountain:
"There is no turning back."
On reforms, Xi warned:
"The road of reform and opening are becoming more steep, but we must go forward with conviction, commitment and confidence."
On globalization, Xi talked about a "new form of international relations."
There should be no "bullying" and there should be respect for different development models.
China "will never seek hegemony," Xi says, but we note that China is expanding influence, however, in regions such as the South China Sea, where it has built islands and put military emplacements on them.
“We will resolutely fight an uphill battle to prevent and defuse major risks, lift people out of poverty, and prevent and control pollution,”
Xi closed on the same heavy Communist and Marxist evangelism theme, by saying that China is in the process of:
And remember, China is "standing tall and firm in the East."
But that was not what the market wanted to hear and investors are disappointed for now as Xi provided no new initiatives...
US Futures are fading also...
And early Yuan gains are leaking away...
And for now, no new measures and the old stimulus measures aren't working...
Since June 2018, China has been loosening monetary and fiscal policies in an attempt to refloat the sinking red ponzi amid the shadow banking system's deflation.
As the following chart from Goldman Sachs shows, it is not working as the Current Activity Indicator continues to slump...
It seems no matter what China throws at it, the economy (or the market) won't behave as the text-books say it should.