China's slowing economy is waiting for more stimulus. Here's how the country plans to boost growth
Published On Jan 16, 2025, 3:01 AM
China's economy is currently facing significant slowdowns, leading to an expectation for government stimulus to address weak domestic demand and deflation concerns. Despite promises of fiscal support including ultra-long bonds to boost consumption, actual impacts of these measures might not be felt until later in the year. Analysts remain cautious, particularly about structural challenges and real estate market pressures, while consumer spending continues to show weakness. While optimism exists for some recovery, especially in the property market and through government incentives, uncertainties about long-term economic stability persist. Overall, experts are cautiously optimistic but acknowledge that brighter results may take time to manifest.
Stock Forecasts
FXI
Positive
Given the ongoing governmental stimulus measures aimed at revitalizing the economy, particularly in the retail sector through subsidies, there could be a potential uptick in consumer stocks. However, the long-term structural issues and slow GDP growth expectations indicate that the recovery might be slow and modest.
KBA
Negative
Concerns over deflation and continued pressures in the property market paired with high inventory levels in housing could lead to reduced sentiment in real estate investment. The risk of falling home prices may deter investments in related sectors.
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