China signals shift to loose monetary policy and increased fiscal stimulus for 2025
China's leaders have announced plans for a "moderately loose" monetary policy in 2025, marking a shift from a 14-year "prudent" strategy. This change aims to stimulate the economy amid ongoing challenges, including a trade war and deflation. The Politburo also committed to a more proactive fiscal policy, potentially increasing the fiscal deficit beyond 3%. This could allow for greater government borrowing to support the struggling economy and stabilize key sectors like the stock market and real estate. Despite these promises, skepticism remains about the implementation of these measures, as previous stimulus efforts have not met expectations. The upcoming Central Economic Work Conference will further outline the government's economic priorities for 2025.