In response to ongoing economic challenges, China is ramping up its fiscal policy efforts to boost economic growth in the fourth quarter, reinforcing its target of approximately 5% GDP growth in 2024. This package aims to address slowing domestic demand and real estate instability, setting a foundation for economic resilience.

Intensifying Fiscal Policy Adjustments

At the recent World Bank Development Committee meeting in Washington, D.C., China's Vice-Minister of Finance Liao Min highlighted China's new fiscal measures. These initiatives target local government debt, real estate market stability, and income growth for key groups. “Government spending will act as a catalyst for social investment and consumption,” Liao stated, outlining China's strategy to increase effective demand and confidence in its economic momentum.

Targeted Support for Real Estate, Consumer Demand, and Modernization

China's recent measures focus on stabilizing the real estate sector, a crucial economic pillar. This includes policies designed to bolster both residential and commercial property markets. The government is also encouraging consumer spending through “trade-in” schemes that promote the purchase of new consumer goods and equipment, supporting demand in key sectors.

In addition to real estate and consumer initiatives, China is emphasizing industrial modernization, aiming to enhance resilience in the manufacturing and high-tech industries that are vital for long-term stability.

Investor Response and Confidence

China's economic measures have attracted substantial foreign interest. By the third quarter of 2024, foreign investment in Chinese bonds hit a record $640 billion, reflecting strong global confidence in China's fiscal stability and bond market potential. Alan Ho, Co-Senior Country Officer for China at JPMorgan, noted that regulatory reforms enhancing foreign ownership in securities and funds have made China increasingly attractive to investors.

Economic Outlook and Expert Insights

Economists anticipate that these fiscal initiatives will propel China’s economy in the fourth quarter and beyond. Zou Yunhan from the State Information Center cited policy momentum and technological innovation as key drivers. Experts like Cao Jing of the Chinese Academy of Social Sciences advocate for increased fiscal spending in sectors such as healthcare and education to boost consumer confidence and spending.

Strengthening Growth Prospects

China's comprehensive approach to stimulus highlights its commitment to sustainable growth amid global uncertainty. As these fiscal measures take effect, they are expected to reinforce China’s role in global economic stability, supporting a robust recovery trajectory that aligns with long-term growth objectives.