China's slowing economy is waiting for more stimulus. Here's how the country plans to boost growth

cnbc.com:

BEIJING — As promised government support is still to meaningfully kick in, China's economy hasn't yet seen the turnaround investors have been waiting for.

While policymakers have, since late September, cut interest rates and announced broad stimulus plans, details on highly anticipated fiscal support won't likely come until an annual parliamentary meeting in March. Official GDP figures for 2024 are due Friday.

«China's fiscal stimulus is not yet enough to address the drags on economic growth… We are cautious long term given China's structural challenges,» BlackRock Investment Institute said in a weekly report Tuesday. The firm, which is modestly overweight Chinese stocks, indicated it was ready to buy more if the circumstances changed.

Of growing urgency in the meantime is the drop in domestic demand, and worries about deflation. Consumer prices barely rose in 2024, up by just 0.5% after excluding volatile food and energy prices. That's the slowest rise in at least 10 years, according to records available on the Wind Information database.

«Consumer spending remains weak, foreign investment is declining, and some industries face growth pressure,» Yin Yong, Beijing city mayor, said Tuesday in an official annual report.

The capital city targets 2% consumer price inflation for 2025, and aims to bolster tech development. While nationwide economic goals won't come out until March, senior economic and finance officials have told reporters in the last two weeks that fiscal support is in the works, and issuance of ultra-long bonds to spur consumption would exceed last year's.

China's announced stimulus will begin to take effect this year, but it will likely take time to see a significant impact, Mi Yang, head of research for