Beijing (AFP) – China’s leadership will gather Wednesday to hammer out plans to boost the economy next year, reports said, as they look to address weak domestic demand and the possibility of a deepening trade war with the United States. The annual Central Economic Work Conference (CEWC) is being closely watched by investors for signs of coming stimulus to kickstart growth, which has been hampered by sluggish consumption and a protracted crisis in the property sector.
Beijing is also strapping in for four more years of tensions with the United States under President-elect Donald Trump, who has promised to impose stinging tariffs on China. The closed-door economic meeting is expected to run through Thursday, Bloomberg reported, citing sources. Beijing is yet to confirm the conclave will take place, but it typically convenes in the final month of the year and is attended by President Xi Jinping.
The gathering follows a meeting on Monday of the Politburo — the country’s top decision-making body — at which officials urged “vigorous” support for consumers next year. The top leadership also called for a “moderately loose” monetary policy in 2025, in what analysts said marked a key shift from the “prudent” approach adopted for more than a decade.
Beijing has in recent months unveiled a string of measures intended to boost the economy as they race to achieve an annual growth target of around five percent this year. Xi on Tuesday said the country was “fully confident” it would hit that goal. The measures include key rate cuts, the easing of certain homebuying restrictions, and trade-in programmes intended to boost consumption.
The readout of Monday’s meeting “leaves little doubt that the shift toward a more supportive policy stance that began back in September is still alive and well,” Julian Evans-Pritchard, head of China economics at Capital Economics, said in a note. “We do expect the (central bank) to step up the pace of rate cuts next year,” he added. But he warned “it is unlikely that they will cut rates anywhere near as aggressively as they did during the (global financial crisis).”
Beyond monetary policy, some analysts believe Chinese leaders might move more aggressively to shore up demand at home. “Monetary stimulus will only work if Beijing lifts broader business and household confidence,” Shehzad Qazi, managing director of consultancy firm China Beige Book, told AFP.
While the Politburo meeting aided a bump in Hong Kong and Shanghai stocks on Tuesday, many observers say they are still waiting to see specific policy announcements on how Beijing plans to boost growth in the coming year. “So far there is still no focus on major household side stimulus, which would actually help lift consumer spending in 2025 and beyond,” said Qazi.
© 2024 AFP
