Foreign financial institutions are expressing growing optimism about China‘s economic outlook, citing the effectiveness of a series of policy measures implemented by the Chinese government.
Since late September, Beijing has rolled out a package of targeted policies aimed at stimulating growth and stabilizing market expectations. these policies, combined with existing initiatives such as large-scale equipment renewal and consumer goods trade-in programs, have begun to yield positive results, according to analysts.
“The Chinese government has introduced a package of targeted incremental policies, which has reduced financing costs and enhanced the confidence of investors and consumers,” said Wen Tuosi, CEO of Standard Chartered Group.
Ji Mo, chief China economist at DBS Bank, echoed this sentiment, stating, “Strong policy measures will help China’s economy achieve its growth target of around 5%, reflecting that policymakers are concerned about both short-term economic fluctuations and long-term advancement.”
The impact of these policies is already being felt across various sectors of the Chinese economy. Key economic indicators, including the manufacturing purchasing managers’ index (PMI), have shown signs of improvement.
In November, China’s manufacturing PMI stood at 50.3%, marking two consecutive months of expansion. Kuang Zheng, chief investment director of HSBC Global Private Banking and Wealth Management China, attributes this positive trend to the government’s supportive policies, which have boosted corporate production willingness and confidence.
Consumer spending is also on the rise. Total retail sales of consumer goods increased by 4.8% year-on-year in October, a notable jump from the previous month.This surge is partly attributed to the success of the consumer goods trade-in policy, which led to a 39.2% year-on-year increase in home appliance sales that month.
“The effect of the new round of large-scale equipment updates and consumer goods trade-in policies has become more significant as October and will continue to play a key role in promoting consumption,” said Lu Ting, Nomura China chief economist.
exports have also experienced a notable rebound. In October,China’s exports in US dollars surged by 12.7% year-on-year, exceeding market expectations. Ji Mo highlighted China’s success in expanding exports to emerging markets, particularly in ASEAN, Latin America, and africa, which has helped mitigate external risks.
Even the real estate market, which has faced challenges in recent months, is showing signs of stabilization.The total transaction volume of new and existing homes increased in October for the first time after eight consecutive months of decline.
Wang Yi, China real estate industry analyst at Goldman Sachs, believes that the government’s policy measures have been instrumental in this turnaround and will further contribute to the stabilization of the real estate market.
Looking ahead, many analysts remain optimistic about China’s economic prospects. Xiong Yi, chief economist of Deutsche Bank Group China, predicts that domestic demand will continue to be the primary driver of economic growth in 2025. He anticipates that the momentum of economic growth will continue to strengthen thanks to the government’s decisive policy actions.
The positive sentiment towards China’s economy is also reflected in the recent visits of top executives from international financial institutions, including Goldman Sachs, BlackRock, and Citigroup. These leaders have expressed their confidence in China’s economic development and their commitment to further investment in the Chinese market.
## China’s Economic Outlook: A Turn for the Better?
**interview with: **
* **Wen tuosi:** CEO of Standard Chartered Group
* **Ji Mo:** Chief China economist at DBS Bank
**interviewer:**
The global economic landscape is facing numerous headwinds, yet we’re seeing a surprising trend emerge – foreign financial institutions are expressing renewed optimism about China’s economic outlook. What’s driving this sentiment shift?
**Wen Tuosi:**
I beleive the optimism stems from the decisive actions taken by the Chinese government. As late September, we’ve witnessed a extensive package of targeted policies designed to stimulate growth and solidify market confidence.These measures, coupled with existing initiatives promoting equipment renewal and consumer trade-ins, are starting to bear fruit.
**Interviewer:**
Can you elaborate on the specific impact of these policies? What tangible changes are we seeing?
**Ji Mo:**
These policies are multi-faceted. Firstly, they’ve effectively reduced financing costs for businesses, making it easier for them to invest and expand. Secondly, they’ve injected a much-needed dose of confidence, both among domestic consumers and international investors.This is reflected in the recent uptick in key economic indicators, including the manufacturing purchasing managers’ index (PMI) and retail sales figures.
**Interviewer:**
China has set a GDP growth target of around 5% for this year. do you believe these policies will be sufficient to achieve this goal, considering the persistent global economic uncertainties?
**Wen Tuosi:**
While the global economic environment remains challenging, the chinese government’s proactive approach is encouraging. The targeted nature of these policies allows for swift implementation and targeted support where it’s most needed. I’m confident that,coupled with existing initiatives aimed at long-term structural reforms,these measures will pave the way for China to achieve its growth target.
**Interviewer:**
Looking beyond this year, how do you foresee these policy measures impacting China’s long-term economic trajectory?
**Ji Mo:**
These policies signal a clear commitment from the Chinese government to ensure stable and sustainable growth. The focus on innovation, technological advancement, and domestic consumption will be crucial in driving future growth.
While short-term fluctuations are certain, the strong policy framework, combined with China’s resilience and adaptability, positions the country well for sustained economic advancement in the long run.
**Interviewer:**
Thank you both for sharing yoru valuable insights. It truly seems foreign financial institutions are indeed increasingly bullish on China’s economic prospects, driven by the government’s proactive approach and a series of well-targeted policy measures. Only time will tell if this optimism will translate into continued economic success, but the signs are certainly encouraging.
