Dec 9 2024: China has announced plans to adopt an “appropriately loose” monetary policy in the coming year to stimulate economic growth, according to state media reports on Monday. The decision, revealed during a Politburo meeting, marks the first shift toward monetary easing since 2010.
Alongside this adjustment, China will pursue a more proactive fiscal policy and intensify “unconventional” counter-cyclical measures, as stated by the Politburo and reported by Xinhua. The government emphasized the need to “vigorously” promote consumption and expand domestic demand comprehensively.
These announcements come ahead of the annual Central Economic Work Conference, where key targets and policy goals for 2025 will be finalized.
The Politburo underscored the importance of adhering to the principle of “pursuing progress while maintaining stability” in 2025, leveraging innovation to drive economic stability.
This shift in monetary policy stance represents a significant development. China previously adopted an “appropriately loose” policy during the 2008 global financial crisis but transitioned to a “prudent” approach by late 2010.
The central bank’s framework for monetary policy includes five stances—ranging from “loose” to “tight”—allowing flexibility to adapt to economic conditions. This latest move suggests a recalibration to stimulate growth amid evolving global and domestic challenges
