Catenaa, Tuesday, December 10, 2024 – China’s leaders on December 9 announced a significant pivot in economic policy, adopting bolder measures to address slowing growth and prepare for 2025, while tensions with the US over trade and technology continue to escalate.
The Politburo, the nation’s top decision-making body led by President Xi Jinping, pledged to implement a “moderately loose” monetary policy, marking a shift from over a decade of “prudent” economic management. This move comes as China faces sluggish domestic consumption, a struggling property market, and rising government debt.
Officials emphasized the need to boost domestic demand and improve investment efficiency, promising a “more proactive” fiscal approach, which could include increased spending and a higher fiscal deficit in 2025.
The shift aims to strengthen internal growth drivers to stabilize the economy amid global uncertainties.
Meanwhile, the trade conflict with the United States is adding pressure.
Earlier this month China imposed export controls on critical minerals such as gallium and germanium, essential for semiconductors and other high-tech products, in response to US restrictions on Chinese technology.
In a further escalation, Beijing also launched an antitrust investigation into Nvidia, the leading US chipmaker, over its acquisition of Mellanox Technologies.
Following the policy announcement, Chinese stock markets surged, and regional currencies appreciated as investors welcomed the shift toward growth-oriented measures.
Analysts suggest China’s urgency is also influenced by the potential for heightened trade tensions under the newly re-elected US president.
