China pledges to strengthen fiscal policy to support economic recovery

The top decision-making body of China’s ruling Communist Party said the country’s fiscal policy “should be moderately strengthened” to stimulate economic recovery, the state-run Xinhua news agency reported.

The Politburo meeting held on Friday, chaired by Chinese President Xi Jinping, analyzed the economic work to be undertaken in 2024. The office pledged to effectively enhance “economic vitality”, defuse risks and promote the upward trend of recovery in China, the second largest economy in the world. the world.

The Chinese Politburo also announced that it will continue to implement prudent fiscal and monetary policies next year.

Demand for Chinese goods has fallen this year as global growth slows, raising concerns about Beijing’s ability to mount a strong post-pandemic recovery.

Momentum has been hurt by a slew of factors, including the country’s beleaguered real estate market, slowing global growth and geopolitical tensions.

HSBC’s chief Asia economist, Frederick Neumann, told CNBC on Thursday that China’s economy is unlikely to be supported by further fiscal stimulus.

Economists noted that China’s external demand remains relatively weak, and warned that policy support focused solely on the supply side would likely not be enough to achieve lasting results.