But Xi’s efforts to prop up China’s economy cheered investors on Tuesday, with the Shanghai Shenzhen CSI Index rising 4.3pc – its biggest jump since July 2020. However, the index has only recovered some of the losses incurred since the start of August, showing the scale of the slide in China’s markets.

Xiangrong Yu, economist at Citi, said the stimulus package “is not a game changer”. He said: “We believe what’s lacking in the financial system is not liquidity but genuine credit demand.

“The policy rate and downpayment cuts would allow households to borrow more … and at lower costs. The issue, however, could be their lack of willingness to leverage up amid [the] continued property downturn.”

Households have not responded to previous cuts by borrowing more, while businesses are cautious and the government is worried about its own debts.

Mr Yu added: “Given the confidence issues among households and corporates, we doubt the measures are sufficient to jump-start the credit engine.”

Lynn Song, ING’s chief economist for Greater China, said without extra government spending, he will not upgrade his forecasts for GDP growth.

He said: “China is currently in a bit of a negative feedback loop where weak confidence, slowing economic activity and falling asset prices are feeding into each other. But this is due to extraordinary catalysts pushing it into this situation, with the pandemic shock, policy shocks, as well as tariff and sanction shocks playing roles in sending the economy into its current situation.

“It will take a similarly aggressive policy boost to take itself out of this negative feedback loop.”

This gloom is a critical part of China’s weakness, according to Duncan Wrigley, chief China economist at Pantheon Macroeconomics, as it encourages families to save instead of spend.

Households in China typically save a third of their disposable incomes, building up their own safety net in case of illness or unemployment. But this means there is little consumer spending to boost the economy, which is struggling due to the collapse of the housing bubble.