China’s stimulus measures are just seeping into the economy | Wilnesh News

China’s latest measures to boost growth have yet to have a widespread impact, data and company reports show, suggesting the world’s second-largest economy will not recover anytime soon.

Growth from real estate to manufacturing has improved since Beijing began announcing stimulus measures in late September. However, companies have been cautious in sharing their outlook over the past few weeks.

When asked about the impact of the stimulus package on an earnings call Friday, the food delivery giant Meituan It only said that in October, the annual decrease in the average hotel order value of its new travel booking business was smaller than in previous months.

“Although it will take some time for the positive effects to fully emerge and further expand to more consumer categories, we are confident that these policies will gradually provide more support to the real economy, stimulate consumption, and bring more growth opportunities to the real economy.” our business,” Meituan Chief Financial Officer and Senior Vice President Chen Shaohui said, according to a recording of the earnings call.

Senior executive of e-commerce company Alibaba and social media operators Tencent It made similar remarks on an earnings call last month, saying it would take time for stimulus measures to translate into growth.

Teneo managing director Gabriel Wildau said in a note on Monday that the step-up in stimulus measures is aimed at reaching the official target of around 5% this year and a similar pace next year while preventing financial Unstable. For him, the economic tone shows that “technological self-sufficiency and national security remain China’s top priorities.”

“Going forward, our sources expect stimulus measures in 2025 to be phased in in a data-dependent manner,” Wildau said. “‘Just enough’ rather than ‘whatever it takes’ will be the guiding principle.”

Preliminary economic indicators for November reinforced the picture of improving but not explosive growth.

London Stock Exchange data showed the Caixin manufacturing purchasing managers’ index showed factory activity expanded further, at 51.5, the highest since June. Official PMI Came in 50.3the highest since April. November retail sales and industrial data will be released on December 16.

Caixin’s measure of the manufacturing labor force showed employment shrank for a third straight month in November. Wang Zhe, senior economist at Caixin Think Tank, believes that this shows that “the effects of economic stimulus policies have not yet appeared in the labor market, and companies’ confidence in expanding their workforce needs to be enhanced.” said in a report.

“Although the economic downturn appears to be bottoming out, further consolidation is needed,” Wang said, noting rising risks of “external uncertainty.”

The United States on Monday issued another round of restrictions aimed at clamping down on Chinese chipmakers. President-elect Donald Trump announced last week that he plans to impose a 10% tariff on all U.S. imports of Chinese goods upon taking office in January.

A survey of Chinese companies released on Monday by U.S. consulting firm China Beige Book showed that “as geopolitics heats up, the market will only crave more and more stimulus measures.”

The company surveyed 1,502 companies from November 14 to 26 and found that retail spending and home sales improved from a year ago despite “generally” weak consumption of services. The report also pointed out that the proportion of respondents borrowing more increased to the highest level since May 2022, indicating a rebound in demand.

“Beijing’s stimulus measures have encouraged businesses to take a step back from the sidelines this month,” the report said. “But without the promise of additional support, this is unlikely to continue.”

China’s Ministry of Finance said it may provide more fiscal support next year. Investors are also watching for details from China’s annual economic planning meeting, which is usually held in mid-December.