Chinese President Xi Jinping (習近平) and other top leaders yesterday said they would adopt a more “relaxed” approach to monetary policy as they hashed out plans to boost the economy next year.
The world’s second-largest economy is battling sluggish domestic consumption, a persistent crisis in the property sector and soaring government debt — all of which threaten Beijing’s official growth target for this year.
Leaders are also eyeing the second term of US president-elect Donald Trump, who has indicated he would reignite his hardball trade policies.
Photo: Reuters
Yesterday, the Politburo Standing Committee of the Chinese Communist Party, the country’s top decision-making body, “held a meeting to analyze and study the economic work of 2025,” state news agency Xinhua said.
“We must vigorously boost consumption, improve investment efficiency, and comprehensively expand domestic demand,” Xinhua quoted officials as having said.
“Next year we should… implement a more active fiscal policy and an appropriately relaxed monetary policy,” they added.
The new wording for the monetary policy marks the first easing of the stance since late 2010, official announcements at the Politburo meetings showed.
China’s central bank has outlined five policy stances — “loose,” “appropriately loose,” “prudent,” “appropriately tight” and “tight” — with flexibility on either side of each.
China adopted an “appropriately loose” monetary policy after the 2008 global financial crisis, before switching to “prudent” in late 2010.
Beijing has unveiled a string of measures since September aimed at bolstering growth, including cutting interest rates, canceling restrictions on homebuying and easing the debt burden on local governments.
However, economists have warned that more direct fiscal stimulus aimed at shoring up domestic consumption is needed to restore full health in China’s economy as fears of a renewed trade dispute with the US mount.
The consumer price index, a key measure of inflation, came in at 0.2 percent, down from 0.3 percent in October, the Chinese National Bureau of Statistics said.
Fitch Ratings has slashed its economic growth forecasts for China next year and in 2026.
China’s GDP growth forecast for next year has been revised to 4.3 percent from 4.5 percent and the 2026 GDP growth has been revised to 4.0 percent from 4.3 percent, while the effective tariff rate on US imports from China is assumed to increase from about 10 percent to about 35 percent, Fitch said yesterday.
Beijing’s leadership also said it would intensify an anti-corruption drive, calling for a “high-pressure posture in punishing” graft.
Officials yesterday pledged to “strengthen the mechanism for investigating and addressing unhealthy practices and corruption.”
Additional reporting by Reuters
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS