The world’s second largest economy is still trying to ward off the specter of deflation, caused by a serious real estate crisis and consumption levels well below those observed before the pandemic.
Chinese political leaders, including President Xi Jinping, announced on Monday that they wanted to “relax” the country’s monetary policy next year, at a time when Beijing is still seeking to stem the loss of steam in the world’s second-largest economy.
This announcement comes one month before the return to the White House of Donald Trump, who threatened to increase American customs duties on Chinese exports at the risk of undermining a crucial engine of Chinese growth.
The 24 members of the Political Bureau of the Central Committee of the Communist Party, the key decision-making body of the ruling organization in China, met on Monday to “analyze and study” the economic measures to come in 2025, according to the agency. New China State.
“We need to vigorously boost consumption, improve investment efficiency and comprehensively expand domestic demand,” the officials were quoted as saying on Monday.
“Next year, we should (…) implement a more proactive fiscal policy and an appropriate easing of monetary policy,” they insisted.
In fact, the world’s second largest economy is still trying to ward off the specter of deflation, caused by a serious real estate crisis and consumption levels well below those observed before the pandemic.
For several months, Beijing has increased plans to stimulate the economy, including a reduction in interest rates and an increase in the debt ceiling for local governments.
In October, the central bank also announced the cut of two key interest rates to historic lows.
-But many economists believe that a more direct fiscal stimulus, targeting support for domestic consumption, is necessary to fully strengthen the health of the world’s second largest economy.
Anti-corruption fight
Members of the Politburo also called on Monday to intensify the fight against corruption in the country, with more solid mechanisms to “strengthen the mechanism for investigating and dealing with unhealthy practices and corruption.”
Since coming to power just over a decade ago, Xi Jinping has launched a sweeping campaign against official corruption, although critics say the move also serves to eliminate his political rivals.
The campaign has recently focused on the military, with the dismissal of senior official Miao Hua after the dismissal of a series of high-ranking figures targeted by corruption investigations.
This meeting of the politburo is held a few days before the start of the Central Conference on Economic Work, a major meeting during which growth objectives are generally set.
The conference could unveil new measures to stimulate the economy, including in terms of monetary policy, even if foreign investors and analysts remain cautious about their scale.
