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China zeroes in on weak consumption at key economic meeting
China zeroes in on weak consumption at key economic meeting
by AFP Staff Writers
Beijing (AFP) Dec 12, 2024

China on Thursday vowed to boost domestic consumption next year, state media said, as leaders grappling with sluggish demand concluded a key economic policy meeting.

Top leaders at the meeting, including Chinese President Xi Jinping, vowed to next year implement a "moderately loose" monetary policy, increase social financing and reduce interest rates "at the right time", according to state broadcaster CCTV.

The annual Central Economic Work Conference (CEWC) was being closely watched for signs of major stimulus measures to boost household spending, which analysts say are needed to get the economy humming smoothly again.

China's senior policymakers also laid out several "key tasks" to be carried out next year, including "vigorously" boosting consumption, stabilising foreign trade and halting the real estate market's fall, CCTV said.

Beijing has in recent months unveiled various measures to boost the economy as leaders race to achieve an official growth target this year of around five percent.

President Xi said on Tuesday that China had "full confidence" in achieving that goal.

Among the tasks for leaders at the CEWC is to fix the government's official growth goal for the following year, though it is not usually made public for several months.

The IMF in October revised down its forecast for China's economic growth this year to 4.8 percent.

The International Monetary Fund expects that figure to slow further to 4.5 percent next year.

Julian Evans-Pritchard of Capital Economics said while the readout from Beijing showed plans to adopt a more supportive policy stance in 2025, it remained unclear how big a boost there would be.

While it was clear China would benefit from policy easing in 2025, Beijing may have to deal with stronger headwinds, "most obviously on the external front", he added.

"So while we may get a near-term stimulus bounce, we're still not convinced that policy support will prevent the economy from slowing further next year," said Evans-Pritchard.

Former US president Donald Trump -- who returns to the White House next month -- unleashed a brutal trade war with China during his first term, decrying alleged intellectual property theft and other "unfair" practices.

He has pledged to impose even higher tariffs on the world's second-largest economy after taking office on January 20.

Xi warned on Tuesday that "there will be no winners" in a trade war, which he said goes "against historical trends and economic rules".

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