China’s 2024 ‘Two Sessions’ Hint at Increased Fiscal Stimulus for the Economy

Beijing Emphasizes Proactive Fiscal Policies at Final Politburo Meeting Before Annual Parliamentary Sessions to Boost China’s Economy

The Chinese government held its final meeting with the 24-member team of top officials before the annual parliamentary sessions, known as the “two sessions,” which are set to take place next week. During the Politburo meeting, officials emphasized the need for proactive fiscal policies and flexible monetary policies in order to create a stable and predictable policy environment.

The language used at this meeting echoes previous statements made at the central economic work conference in December, where Beijing pledged to implement a variety of pro-growth policies to revive the economy. Despite growing by 5.2% year on year in 2023, China still faces challenges such as a property market crisis, declining exports, changing demographics, weak consumer spending, complex geopolitical circumstances, a hesitant private sector, and concerned foreign investors.

Economists have called for increased government spending to address these challenges, but Beijing has been cautious about launching a large stimulus program due to concerns about further increasing the heavy debt burden. However, recent actions taken by the Chinese government suggest that more actions may be taken in order to boost market sentiment and address economic challenges.

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