Chinese Advisors Call for Stronger Stimulus

Forex - Chinese government advisors are recommending that Beijing maintain an economic growth target of around 5.0% for next year, while pushing for stronger fiscal incentives to mitigate the impact of expected increases in U.S. tariffs on the country's exports.

The ambition to sustain a growth rate that seems challenging throughout 2024, if confirmed, would surprise financial markets betting on a gradual slowdown in the world's second-largest economy as trade tensions escalate.

Four of the six advisors speaking to Reuters prefer a target of around 5% for 2025. One advisor suggests a target of "above 4%", while another recommends a range of 4.5% to 5%. A Reuters poll conducted this week forecasts that China will grow by 4.5% next year, while also indicating that tariff impacts could affect growth by up to 1 percentage point.

Advisors not involved in the decision-making process will present their recommendations at next month's closed-door annual Central Economic Work Conference, where senior leaders will discuss policies and targets for the upcoming year.

The advisors' recommendations are considered by policymakers in the final decision-making process. While the most popular views among advisors are not always adopted, they are generally taken into account. Plans may also change before the legislative session.