Global Times: Boosted by government's proactive monetary and fiscal stimulus, Chinese economy is expected to gain renewed growth impetus in 2025

BEIJING, Dec. 9, 2024 /PRNewswire/ -- China has released a number of upward economic data in recent days about its economy, relating to manufacturing, retail sales, transportation and capital market performance, which analysts said point to rising momentum of recovery, spurred by the government's pro-active financial and fiscal policies.

The Political Bureau of the Communist Party of China (CPC) Central Committee on Monday held a meeting to analyze and study the economic work of 2025 and arrange Party conduct and anti-corruption work, the Xinhua News Agency reported.

The main goals and tasks for economic and social development in 2024 will be successfully accomplished, according to the meeting.

It urged implementing a more proactive fiscal policy and a moderately loose monetary policy next year.

It is necessary to enrich and improve the policy toolkit, strengthen unconventional counter-cyclical adjustments, intensify the coordination of various policies, and make the macro regulation more forward-looking, targeted and effective, the meeting noted.

The country should vigorously boost consumption, improve the investment efficiency, and expand domestic demand on all fronts, it said.

Morale-boosting moves

As December is considered a key month for consolidating economic growth for this year and mapping out a new blueprint for next year, Chinese observers expect that the government's package of incremental pro-growth policies implemented since September will continue to yield favorable results.

The supportive financial and fiscal policies will only become more accommodative to boost public expectations and investor morale in 2025, the analysts said.

China is scheduled to release its foreign trade data for November this week, which is likely to show another robust month. In terms of manufacturing activity, the purchasing managers' index (PMI) reached 50.3 in November, hitting a five-month high, the National Bureau of Statistics (NBS) revealed.

In recent months, market activities have been gaining pace across a wide range of the economic sectors.

The Ministry of Commerce reported that, in the first half of November, sales of home appliances, telecom devices, apparel and clothing grew by 45 percent, 28 percent, and 6 percent year-on-year, respectively.

In November alone, the wholesale sales of new-energy vehicles in China surged to 1.46 million units, up by an impressive 51-percent year-on-year, according to data released by the China Passenger Car Association.

As to the transportation sector, the number of passengers handled by the country's railway network and civil aviation system rose by 13.8 percent and 19.1 percent year-on-year respectively, in the first three quarters.

China's capital market saw an upward trend too. In October, the average daily trading volume in the Shanghai and Shenzhen bourses stood at 1.98 trillion yuan together, marking a month-on-month growth of nearly 150 percent.

The State Council, the cabinet, in March released an action plan to initiate large-scale equipment upgrading and trade-ins of big-ticket consumer goods. The Commerce Ministry data showed on Saturday that sales of home appliances covered by the policy-backed trade-in program reached 201.97 billion yuan ($28.12 billion) to date, led by electric cars and other green products.

Multiple positive signs

"Entering the fourth quarter, we have detected multiple positive signs that the Chinese economy has displayed its resilience, improving month by month, primarily boosted by the package of supportive policies rolled out by the policymakers. All the indicators bode well for the economy to achieve the annual growth target of around 5-percent GDP growth," Tian Yun, an economist based in Beijing, told the Global Times on Monday.

Hu Qimu, deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times that the government's stimulus policies have started to show effectiveness in tackling economic headwinds - encompassing insufficient domestic demand, local government debt, a property market slowdown and external geopolitical uncertainties.

"As China has embarked on a high-quality development path, it is important that more targeted measures are meted out to address the underlying problems that constrain the development vitality of the economy," Hu said.

In retrospect, throughout 2024, the Chinese government has sent a clear and persistent signal that reform and opening-up policy is not for short-term purpose but aimed at achieving long-term goals, and, policies such as fostering new productive quality forces, adjusting industrial structures, and tapping into the country's consumption potential are of great importance for the economy's growth in the future, Hu said.

"Chinese authorities need to be prepared for the changing situation in the world, by persistently accelerating China's domestic consumption - a policy priority for 2025," Tian said.

Chinese analysts projected that the world's second-largest economy will further rebound and maintain a sound growth rate next year.

"China's long-term economic fundamentals remain very solid," Hu said.

China's upward economic growth prospects have prompted some foreign institutions to voice optimism on Chinese assets. For example, Goldman Sachs has upgraded its call on Chinese stocks to overweight in a report released last week, citing optimism over the government's stimulus measures. It predicted that Chinese equities could grow another 15-20 percent in valuations "if authorities deliver on policy promises."

SOURCE Global Times