China’s Politburo pledges support, sending stronger-than-expected signal to boost economy
- Politburo’s wording, which still puts the onus on policy directions, signals moves to reach GDP growth target, restore confidence
China has vowed to step up macro policies and stabilise market confidence to ensure that leadership’s full-year economic growth goal is achieved as the economy faces “increasing negative influence” from the outside world and insufficient demand at home.
Wording out of a Politburo meeting on Tuesday suggested potentially more drastic policy support from Beijing over the remainder of the year, to boost the private sector and restore investor confidence, though not many details were unveiled from the high-level meeting.
The top leadership vowed to unleash domestic demand, pledged more macro support, warned against “vicious competition” among local companies, and called for the full implementation of policies among local-level officials, according to a meeting on Tuesday of the Chinese Communist Party’s 24-member Politburo, the party’s top decision-making body led by President Xi Jinping.
The politburo meeting focused on current challenges and pressing issues, reflecting China’s emphasis on stable growth, said Su Yue, principal economist for China at the Economist Intelligence Unit.
“The urgency of stimulating the domestic economy is highlighted by increased external pressures, including the potential return of [former US president Donald] Trump.”
Su anticipated that a 10 per cent additional tariff increase on Chinese exports to the US could reduce China’s real GDP growth by between 0.3 and 0.4 percentage points, on average, in both 2025 and 2026, assuming that other factors remain constant.
