China has set a positive tone for 2025 by announcing a series of proactive fiscal policies and a moderately loose monetary stance, aiming to invigorate its economy and boost market confidence.
At a recent meeting of the Political Bureau of the Communist Party of China Central Committee, top leaders outlined strategies focused on enhancing consumer spending, improving investment efficiency, and promoting high-level opening up. These measures reflect the government's commitment to stabilizing and stimulating economic growth.
The market responded enthusiastically to the announcement, with key A-shares indices showing significant gains. The Shanghai Composite Index rose by 2.58%, the Shenzhen Composite Index increased by 3.66%, and the ChiNext Index surged by 4.88%, signaling strong investor optimism.
Economists and analysts interviewed by CGTN provided insights into China's economic outlook for 2025. Zhang Jun, chief economist of China Galaxy Securities, highlighted the phrase \"strengthening extraordinary countercyclical adjustments\" as a first-time mention, underscoring the government's determination to maintain stable growth. Zhang also noted that a \"moderately loose\" monetary policy, last referenced in 2009 and 2010, suggests the central bank may implement more aggressive rate cuts and reserve requirement ratio reductions, potentially totaling a 40-60 basis point reduction in policy rates and a 150-250 basis point decrease in reserve requirements for the coming year.
Focusing on domestic demand, UBS Chief China Economist Wang Tao anticipates a modest increase in consumption support measures. These include the expansion of the trade-in scheme for appliances and increased government spending in social sectors. These initiatives aim to boost household consumption and support sustainable economic development.
With these comprehensive policies, China is positioning itself for robust economic performance in 2025, fostering an environment conducive to growth, innovation, and sustained market confidence.
Reference(s):
China to intensify policy support for economic growth in 2025
cgtn.com
