China plans 2025 measures to boost economic growth

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China plans to "adequately relax" monetary policy for the coming year, supplemented by a proactive fiscal policy in order to boost economic growth. This reported state media on Monday, citing the political office of the Communist Party.

focus on inner demand and consumption

the China has set itself the goal of expanding domestic demand and increasing consumption, as Xinhua reported. These statements were made in the run -up to the upcoming central economic conference, in which basic goals and political intentions are to be determined for the next year.

market reactions in the course of the announcements

The stock exchanges reacted positively to the announcement of the political office, and China's government bonds experienced an upswing. The Hang Seng Index in Hong Kong rose by 2.8 % and thus reached the highest level in a month.

political framework for 2025

According to Xinhua, the government must adhere to the principle of "progress while at the same time". The report emphasizes that a proactive fiscal policy and an adequately relaxed monetary policy should be implemented in order to improve the range of tools of political measures and to strengthen extraordinary counter -cyclical adjustments. In addition, the housing market and the stock market are to be stabilized, although no detailed information has been given.

important adjustments in monetary policy

The current re-evaluation of monetary policy has been the first relaxation since the end of 2010. "We interpret this as a strong fiscal stimulus, large interest rate cuts and the acquisition of assets in 2025," said Xing Zhaopeng, senior China analyst. "The political course shows a strong trust in the threats of Trump", which could affect tariffs.

challenges in China's economy

This year the Chinese economy has to deal with the central bank due to considerable pressure on politics and a more aggressive monetary policy of the central bank. In September, the greatest monetary loosening has been announced since the pandemic to boost the economy by reducing interest rates and 1 Billion Yuan (approx. 140 billion US dollars) were fed into the financial system.

growth goals and geopolitical risks

It is assumed that China may be able to reach the growth target of around 5 % this year. However, it could be difficult to maintain this growth rate in 2025, in particular with the return of the elected US President Donald Trump into the White House, which has threatened with tariffs of 60 % or more on Chinese imports.

structural challenges and recommendations

China's economy has rely on production and export this year, while the development of demand disappointed. Household demand suffers greatly due to a severe real estate crisis that exhausts the wealth of consumers. Economists recommend the government to leave the growth unchanged next time and at the same time set more energetic fiscal incentives to counteract the effects of the expected US tariffs and reduce deflation pressure.

The threats from Trump's tariffs have shaken China's industrial complex, which sells goods worth over $ 400 billion to the United States every year. China's finance minister Lan Foan said that further incentive measures were being planned without giving details. In addition, it was suggested that Beijing should apply more consumer-oriented policies and offer greater financial support for low-income households, while already announced tax, social and other political changes are being promoted to approach structural problems So far, however, the Chinese government has focused primarily on the modernization of the export -dependent production sector, which in the areas of electric vehicles, solar energy and batteries brought remarkable success, but caused resistance from important trading partners.