China Policy Meetings Offer Most Concrete Sign of Major Stimulus Yet — Market Talk
2024-12-13
Category: economic

Two big policy meetings in China this week offer the most concrete sign yet of significant stimulus next year, even though details were scant, says Moody's Analytics' Harry Murphy Cruise. Alongside looser monetary policy, the Politburo vowed more proactive fiscal policy to boost consumption, investment efficiency, and demand. Then the Central Economic Work Conference set consumption as the top priority, says Cruise, head of China and Australia economics. Plans to make that happen include lifting the fiscal deficit and issuing more government bonds. "The lift in government spending is overdue," he says. China's likely trying to fill the void left by potential tariffs. "We expect a spending program of a little over 1% of GDP in 2025 and 2026," he says. That would add around 0.3 ppts to growth. (fabiana.negrinochoa@wsj.com)