President Xi Jinping said China will implement “more proactive” macroeconomic policies next year, state media reported, while addressing a top political advisory body on Tuesday.
The country has struggled this year to emerge from a crisis fueled by a housing market crisis, weak consumption and growing public debt.
Beijing has unveiled a series of aggressive measures in recent months aimed at boosting growth, including cutting interest rates, lifting restrictions on home purchases and easing local governments’ debt burdens. .
But economists have warned that more direct fiscal stimulus aimed at shoring up domestic consumption is needed to restore China’s economy to full health.
“We must…further deepen reform, expand high-level opening-up, better coordinate development and security, (and) implement more proactive and effective macroeconomic policies,” the state broadcaster said. closed circuit television quoted Xi as telling the National Committee of the Chinese People’s Political Consultative Conference at a New Year’s tea party.
Beijing is aiming for an official national growth target this year of around five percent, a target that officials have expressed confidence in achieving but that many economists believe it will narrowly miss.
“The productivity of the new quality is developing steadily and the annual GDP is expected to grow by about five percent,” Xi reiterated on Tuesday.
The International Monetary Fund (IMF) expects China’s economy to grow 4.8 percent this year and 4.5 percent next year.
“Short-term boost”
Xi’s comments came as Chinese authorities released upbeat factory activity figures, a sign that recent stimulus measures may be starting to take effect.
China’s Purchasing Managers’ Index (PMI), a key measure of industrial production, was 50.1 in December, marking the third straight month of expansion, the National Bureau of Statistics said on Tuesday.
The figure was below Bloomberg analysts’ prediction of 50.2, but still above 50, indicating an expansion in manufacturing activity. A reading below showing a contraction.
The key indicator fell for six months in the middle of the year before returning to expansion territory in October.
The non-manufacturing PMI, which measures activity in the services sector, reached 52.2 in December, up from 50.0 in November.
“Official PMIs suggest the economy gained momentum in December, driven by faster growth in the services and construction sectors,” Capital Economics’ Gabriel Ng wrote in a note to clients on Tuesday.
“Increased policy support towards the end of the year has clearly provided a boost to near-term growth,” Ng wrote.
Ng noted that export orders in particular rose to a four-month high in December, “likely helped by increased orders from U.S. importers ahead of potential Trump tariffs.”
