China signals more forceful stimulus to come next year
Summary
China’s leaders signaled a more forceful policy approach to boost domestic demand, as the world’s second-largest economy braces for escalating trade tensions with the incoming Trump administration.
China’s leaders signaled a more forceful policy approach for next year to boost domestic demand, as the world’s second-largest economy braces for escalating trade tensions with the incoming Trump administration.
The 24-member Politburo, China’s top decision-making body, pledged Monday in a meeting to implement more proactive fiscal policy and moderately loose monetary policy for next year.
It also vowed to strengthen extraordinary countercyclical adjustment, boost domestic demand and stabilize housing and property markets, according to an official readout published by the state-run Xinhua News Agency.
Monday’s meeting marked a shift in Chinese decision makers’ stance on monetary policy for the first time in more than a decade to “moderately loose" from a “prudent" stance, hinting that more monetary easing will come in 2025.
Meanwhile, the mention of more proactive fiscal policy suggests Beijing might adopt a bigger fiscal deficit at March’s legislature session, economists say. Xinhua had said in commentary last week that China had room to increase its borrowing and fiscal deficit next year.
Officials at the monthly gathering also said China’s main annual economic and social development targets will be accomplished successfully, suggesting that the country’s top leadership is confident that Beijing’s annual growth goal of around 5% for 2024 will be achieved.
The Politburo’s December meeting comes just days before the Central Economic Work Conference, where Chinese leaders are expected to outline their policy priorities and discuss annual growth targets for next year.
The body’s meeting follows on the heels of the release of China’s November inflation data, which pointed to persistently weak domestic demand despite Beijing’s push to revive spending as a yearslong property downturn continues to drag on.
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