China's top leaders have announced plans to implement more active fiscal policies and moderately loose monetary policies to provide support for the slowing economy. This decision comes amidst threats of higher tariffs on Chinese exports, with Premier Li Qiang criticizing such measures for hindering global growth.
The announcement, made during a meeting by the ruling Communist Party's Politburo, led to a significant shift in market sentiment. The shift towards moderately loose monetary policies was well-received by investors, resulting in a 2.8% jump in the Hang Seng index in Hong Kong.
Market analysts view this policy recalibration as a move to cushion the anticipated economic shocks from higher tariffs. The shift marks a departure from the prudent monetary policies that have been in place for the past 14 years.
Recent policies introduced by the Chinese central bank and regulators have aimed at encouraging increased spending by businesses and households. The government's commitment to a more supportive policy stance has been reaffirmed, with expectations of faster interest rate cuts in the coming year.
The annual economic planning meeting later in the week is expected to further solidify these policies for the upcoming year. China's economy has been growing slightly below the official target of 5% expansion this year, with challenges in the property market and subdued consumer spending.
The government's focus on improving people's livelihood protection and security reflects concerns over high youth unemployment and household financial stability. Consumer inflation remains low, providing room for potential interest rate cuts to stimulate economic growth.
Premier Li's meeting with international financial organizations highlighted concerns over trade restrictions and tariffs imposed by certain countries. While not naming the United States directly, Li's comments were seen as a veiled criticism of protectionist measures that could disrupt global economic operations.
