BEIJING, CHINA – NOVEMBER 9: Chinese President Xi Jinping meets with Indonesian President Prabowo Subianto (not pictured) at the Great Hall of the People on November 9, 2024 in Beijing, China.
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China confirmed recent policy shifts and highlighted plans to boost growth at a high-level economic planning meeting that ended on Thursday, according to CCTV’s daily evening news report.
The report was released after markets closed in mainland China. this iShares China Large Cap ETF (FXI) It rose 0.8% in pre-market trading.
The annual economic planning meeting chaired by Chinese President Xi Jinping called for aggressive fiscal policy next year, increasing the deficit and issuing more ultra-long-term bonds, according to state media reports. The meeting also confirmed China’s plans for moderately loose monetary policy, it added.
The sentiment echoed Monday’s high-level meeting of the Politburo, the second most powerful body in the ruling Chinese Communist Party. This use of “moderately loose” monetary policy has not been seen since the depths of the global financial crisis in 2008. And the urgency to prepare for a possible trade war with the United States is growing to the White House.
China usually announces full-year growth targets and fiscal deficits at its annual National People’s Congress meeting in March.
The Politburo vowed on Monday to implement “more proactive” fiscal tools and “moderately loose” monetary policy by 2025, while also stepping up “unconventional countercyclical adjustments” to boost domestic consumption “all-round” Report from the state-run Xinhua News Agency.
Since late September, Chinese officials have stepped up stimulus measures, including cutting interest rates multiple times, easing home-buying requirements, providing liquidity support for the stock market and launching a 10 trillion yuan ($1.4 trillion) stimulus package over five years. to alleviate local government debt problems.
However, recent economic data suggests these measures will not be enough to offset persistent deflationary pressures in the economy, fueling investor hopes that Beijing will further increase stimulus measures to revive growth.
The country’s consumer price inflation fell to a five-month low in November, while wholesale price deflation persisted and the producer price index fell for the 26th consecutive month.
Chinese authorities reiterated Beijing’s intention to stimulate consumption throughout the year. Apart from subsidy schemes to encourage the trading of second-hand home appliances and electronics, there are few policies in place.
Although policy details and specific figures will not be announced until the National People’s Congress in March next year, Beijing is widely expected to maintain its GDP growth target for next year at “around 5%.”
Policymakers may also set higher-than-usual budgets Deficit target as high as 4% Some economists predict this will lead the central government to increase borrowing to support the weakening economy.
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