It is also designed to make the stock market the go-to wealth creation mechanism for Chinese consumers instead of yet more homes and property purchases.
Growth over the past decade has been fuelled by the booming property sector, with many Chinese consumers buying second and third homes to store their expanding wealth.
This reversed four years ago after the government cracked down on property lending – leading to a spiral of wealth decline for homeowners and many bankruptcies for developers.
Since then the property gloom has continued to cast a pall over China’s $18 trillion (£13.8 trillion) economy. Miserable and spend-thrift consumers would now rather save than spend, slowing the economy in the process.
Beijing’s stimulus has ignited hopes that this could all turnaround, and provide a boost to the West in the process.
Mark Preskett, a fund manager at Morningstar Wealth, said a Chinese stock market rally would benefit key industries.
“Perhaps it’s not a silver bullet for the 5pc growth target but it definitely signals that they are serious about deflation and tackling the slowing economy,” he said.
“There was a wide gamut of policies before this trying to cool the economy and stop speculation so this is a big sea change.”
In the wake of Xi’s stimulus, China’s flagship CSI 300 index gained 13pc – the most since November 2008.
Yet after the early sugar rush, a more sober assessment has started to set in – raising fears about whether Xi’s bazooka has misfired.
In an early sign of how much store investors place in policy announcements, Chinese stocks slumped 5pc on Tuesday after a press conference by China’s top economic planning department — the National Development and Reform Commission – failed to deliver any more measures.
At the market’s close on Friday, the main Shanghai index was down 3.3pc for the week as the rally fizzled out.
Some fear Xi’s stimulus is likely to fail as many Chinese consumers have become all too wary of the Politburo’s flip-flopping on economic policy.
“The party has a real economic problem on its hands with the decline of the property market, because they’ve lost a major driver of growth that has bubbled for 20 years,” says Andrew Collier, a senior fellow at the Harvard Kennedy School
“I find it ironic that a country that’s so authoritarian and has such a state-owned system is eager to get the animal spirits of capitalism to rejuvenate the economy.
“But they’re not doing anything structural, so people aren’t buying it. People said that they’re going to fire a bazooka – they fired a pop gun.”