Chinese leaders concluded a two-day planning meeting in Beijing with commitments to invigorate the world's second-largest economy. However, specific details on new stimulus measures were not disclosed. The state-run CCTV report highlighted a strategy outlined earlier in the week after a session of the ruling Communist Party’s powerful Politburo. Leaders vowed to adopt a more proactive fiscal approach and loosen monetary policy.
Market optimism in China has risen recently amid expectations of increased stimulus to address weak consumer spending, which has caused the economy to grow slightly below the government's target of about 5% this year. The shift towards a 'moderately loose' monetary policy marks a departure from the cautious 'prudent' approach maintained for the past decade post the global financial crisis.
While efforts to revive the economy this year have been broad, they have been more incremental and technical than the substantial stimulus anticipated by investors. The CCTV report mentioned plans to raise the fiscal deficit and issue 'super-long' government bonds to support additional spending, without specifying the exact amounts.
Leaders also committed to stabilizing the property market, enhancing consumer spending by addressing job market weaknesses, and ensuring wage growth aligns with economic expansion. The party is formulating long-term strategies for the upcoming five-year plan, emphasizing advanced technologies and 'higher quality' growth in line with President Xi Jinping's vision.
Recent policies introduced by the Chinese central bank and regulators aimed at boosting spending have been reiterated following the Politburo meeting. Initiatives such as subsidies for replacing old cars and appliances with energy-efficient models have bolstered auto sales, with passenger car sales surging 17.5% in November compared to the previous year.
Despite positive indicators in exports and a gradual property market recovery, challenges remain, including the impact of tariffs on Chinese products. Economists anticipate a gradual rebound in the property sector. The government's focus on stimulating consumption and strategic planning for future growth underscores China's commitment to economic resilience and development.
