BEIJING: China has “larger room to take bolder action” in macroeconomic adjustments to navigate looming tariff uncertainties, with more subsidies to consumers still possible in 2025, said economists from leading investment banks.
In an exclusive interview with China Daily, Wang Tao, head of Asia economics and chief China economist at UBS Investment Bank, highlighted that beyond stimulus injections, accelerated structural reforms are also on the horizon, which are anticipated to be a key focus of the upcoming high-profile meeting to outline next year’s economic work.
“Given the downward pressures, the healthy balance sheet of the central government and the fact that the Chinese government has assets, they still have larger room to take bolder action to come out with bigger stimulus,” Wang said. Wang said that people are looking for income and consumption subsidies to households and measures to support employment.
“We think it’s possible that more of these measures could be announced in 2025, maybe at the National People’s Congress meeting in March.”
Wang’s words came as the markets await the Central Economic Work Conference — expected to be held in mid-December — to outline China’s economic policy orientation for 2025, when the world’s second-largest economy will wade through the potential downward pressures from the incoming Trump administration’s trading policies.
US President-elect Donald Trump said this week that he will impose a 25 percent tariff on products from Mexico and Canada and an additional 10 percent tariff on goods from China, and had previously proposed a more aggressive scenario of a 60 percent tariff on Chinese goods.
China’s reactions on the macro-economic adjustment front would be of great significance, according to experts. This is because the potential tariffs, coupled with domestic challenges of property market adjustments, could lead to a marked slowdown in the country’s growth in 2025 — if stimulus policies are not sizable and timely enough — compared with this year’s expected rate of 5 percent or slightly lower.
Wang said she believes that additional policy support in the months ahead, along with recent policy dynamics, “signals a very strong turning of overall government policy in trying to stabilize domestic demand and boost confidence”. –The Daily Mail-China Daily news exchange item
