1. The Fed and China are easing policies simultaneously

Recently, the Federal Reserve cut interest rates by 50 basis points, exceeding market expectations of 25 basis points. At the same time, China has also taken a series of easing measures, including cutting interest rates, lowering reserve requirements, reducing down payment ratios, and convening an emergency economic research meeting, indicating that the two sides may have reached an agreement to a certain extent.

2. Frequent high-level interactions between China and the United States

On the timeline, from US Treasury Secretary Yellen's visit to China in mid-August, to White House National Security Advisor Sullivan's visit to China at the end of August, to the China-US Economic Working Group's talks on China's increase in holdings of US debt, these events all indicate that the two countries have frequent interactions on economic policies.

3. China’s economic policy shift heralds a consensus

China's economic policies have been relatively conservative in the past, partly due to the influence of tight monetary policy in the United States. But recent changes may indicate that the two sides have reached consensus on some aspects.

4. China and the United States seek stability before and after the election

In order to avoid possible uncertainties before, during and after the U.S. presidential election and during the transfer of power, China and the United States chose to reach an agreement during this sensitive period to prevent the situation from getting out of control.

5. Expectations of loose policies boost market confidence

It is expected that in the coming period, the joint implementation of loose policies by China and the United States will have a positive impact on market sentiment, and may improve the global liquidity environment, which is conducive to the performance of risky assets.

6. The current cooperation is a temporary measure

This cooperation can be seen as a small-scale version of the joint response of China and the United States to the economic crisis during the 2008 financial crisis. However, considering the current international relations context, this cooperation may be temporary, and future negotiations and games will continue.

7. China may further launch fiscal stimulus

In the short to medium term, China is likely to continue to introduce more easing policies, including a potential stabilization fund, and possible fiscal stimulus measures.