China set to bolster policy support for economic growth in 2025
On Monday, China revealed its intention to implement a more proactive fiscal policy alongside a moderately loose monetary policy, which has lifted market sentiment and sparked optimism for the upcoming year.
TroibNews 
On Monday, China unveiled a more proactive fiscal policy along with a moderately loose monetary policy, which have lifted market sentiment and sparked optimism for the upcoming year.
During a meeting of the Political Bureau of the Communist Party of China Central Committee, the nation's top leaders disclosed a series of initiatives aimed at accelerating economic growth. Key strategies include enhancing consumer spending, increasing investment efficiency, and promoting a greater level of openness.
Chinese A-shares experienced a positive start on Tuesday morning, with the Shanghai Composite Index climbing 2.58 percent, the Shenzhen Composite Index rising by 3.66 percent, and the ChiNext Index soaring 4.88 percent.
To evaluate China's economic outlook for 2025, CN spoke with various economists and analysts.
The phrase "strengthening extraordinary countercyclical adjustments" was used for the first time, signaling the government's strong commitment to stabilizing growth, as noted by Zhang Jun, chief economist of China Galaxy Securities.
"'Moderately loose' monetary policy is the most relaxed monetary stance, typically seen during financial crises," Zhang explained, noting that its last usage was during 2009 and 2010.
China Galaxy Securities anticipates that the central bank will execute more aggressive rate cuts and reserve requirement ratio reductions, specifically a cumulative reduction of 40-60 basis points in policy rates and a 150-250 basis point decrease in the reserve requirement ratio over the coming year.
Emphasis on domestic demand
UBS Chief China Economist Wang Tao forecasts a modest boost in consumption support measures in the upcoming year, which may include expanding the trade-in scheme for appliances and increasing government expenditure in social sectors.
Additionally, the bank expects China to undertake structural reforms to enhance business confidence and social welfare. Wang highlighted that reforms to the social safety net—such as increasing coverage for serious illness insurance, systematically raising payout levels and government contributions for urban-rural resident pensions, and improving public services for rural areas and migrant workers—would contribute to enhanced confidence and spending.
China has made progress in addressing its real estate challenges. The market is showing signs of stabilization; however, as Zhang noted, the primary challenge lies in balancing market stabilization through housing stockpiling against local debt risks, particularly in smaller cities with lower demand and higher debt levels. He emphasized the importance of central government intervention, including the adoption of centralized commercial housing stockpiling policies that bypass local debt quotas or exclude local special stockpiling debts from debt ratio computations.
The threat of tariffs
US president-elect Donald Trump has hinted at imposing a 60 percent tariff on goods imported from China. Economists have recommended strategies to lessen the potential negative effects and foster a more equitable global trade system.
Su Jian, director of the National Center for Economic Research at Peking University, urged that China should focus on stabilizing the US market for Chinese businesses while also exploring alternative strategies, such as enhancing management and technical efficiencies to lower costs.
Zhang proposed providing targeted financial support, such as special loans, to sectors most affected by tariffs. Additional strategies could involve deepening cooperation with the European Union in areas such as climate energy and industrial finance to buffer the impact of US protectionist policies, strengthening economic and trade relations with Belt and Road partner nations, and leveraging China's vast domestic market to attract foreign investment while creating a more favorable business climate.
China's anticipated economic growth is likely to have a beneficial spillover effect on the global economy, especially in Asia.
"China's recovery will create opportunities for other Asian economies by boosting intra-regional trade," stated Raymond Ma, chief investment officer for the Chinese mainland and Hong Kong at Invesco.
He further predicted that leading Chinese companies would expand their global reach in 2025, taking advantage of their competitive strengths and extensive distribution networks to efficiently deliver products.
Jessica Kline contributed to this report for TROIB News
During a meeting of the Political Bureau of the Communist Party of China Central Committee, the nation's top leaders disclosed a series of initiatives aimed at accelerating economic growth. Key strategies include enhancing consumer spending, increasing investment efficiency, and promoting a greater level of openness.
Chinese A-shares experienced a positive start on Tuesday morning, with the Shanghai Composite Index climbing 2.58 percent, the Shenzhen Composite Index rising by 3.66 percent, and the ChiNext Index soaring 4.88 percent.
To evaluate China's economic outlook for 2025, CN spoke with various economists and analysts.
The phrase "strengthening extraordinary countercyclical adjustments" was used for the first time, signaling the government's strong commitment to stabilizing growth, as noted by Zhang Jun, chief economist of China Galaxy Securities.
"'Moderately loose' monetary policy is the most relaxed monetary stance, typically seen during financial crises," Zhang explained, noting that its last usage was during 2009 and 2010.
China Galaxy Securities anticipates that the central bank will execute more aggressive rate cuts and reserve requirement ratio reductions, specifically a cumulative reduction of 40-60 basis points in policy rates and a 150-250 basis point decrease in the reserve requirement ratio over the coming year.
Emphasis on domestic demand
UBS Chief China Economist Wang Tao forecasts a modest boost in consumption support measures in the upcoming year, which may include expanding the trade-in scheme for appliances and increasing government expenditure in social sectors.
Additionally, the bank expects China to undertake structural reforms to enhance business confidence and social welfare. Wang highlighted that reforms to the social safety net—such as increasing coverage for serious illness insurance, systematically raising payout levels and government contributions for urban-rural resident pensions, and improving public services for rural areas and migrant workers—would contribute to enhanced confidence and spending.
China has made progress in addressing its real estate challenges. The market is showing signs of stabilization; however, as Zhang noted, the primary challenge lies in balancing market stabilization through housing stockpiling against local debt risks, particularly in smaller cities with lower demand and higher debt levels. He emphasized the importance of central government intervention, including the adoption of centralized commercial housing stockpiling policies that bypass local debt quotas or exclude local special stockpiling debts from debt ratio computations.
The threat of tariffs
US president-elect Donald Trump has hinted at imposing a 60 percent tariff on goods imported from China. Economists have recommended strategies to lessen the potential negative effects and foster a more equitable global trade system.
Su Jian, director of the National Center for Economic Research at Peking University, urged that China should focus on stabilizing the US market for Chinese businesses while also exploring alternative strategies, such as enhancing management and technical efficiencies to lower costs.
Zhang proposed providing targeted financial support, such as special loans, to sectors most affected by tariffs. Additional strategies could involve deepening cooperation with the European Union in areas such as climate energy and industrial finance to buffer the impact of US protectionist policies, strengthening economic and trade relations with Belt and Road partner nations, and leveraging China's vast domestic market to attract foreign investment while creating a more favorable business climate.
China's anticipated economic growth is likely to have a beneficial spillover effect on the global economy, especially in Asia.
"China's recovery will create opportunities for other Asian economies by boosting intra-regional trade," stated Raymond Ma, chief investment officer for the Chinese mainland and Hong Kong at Invesco.
He further predicted that leading Chinese companies would expand their global reach in 2025, taking advantage of their competitive strengths and extensive distribution networks to efficiently deliver products.
Jessica Kline contributed to this report for TROIB News
