Xi Says China Must Apply 'More Proactive' Macroeconomic Policies in 2025

This picture taken on December 16, 2024 shows a vendor arranging items as people shop in Harbin, China’s Northeastern Heilongjiang province.(Photo by ADEK BERRY / AFP)
This picture taken on December 16, 2024 shows a vendor arranging items as people shop in Harbin, China’s Northeastern Heilongjiang province.(Photo by ADEK BERRY / AFP)
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Xi Says China Must Apply 'More Proactive' Macroeconomic Policies in 2025

This picture taken on December 16, 2024 shows a vendor arranging items as people shop in Harbin, China’s Northeastern Heilongjiang province.(Photo by ADEK BERRY / AFP)
This picture taken on December 16, 2024 shows a vendor arranging items as people shop in Harbin, China’s Northeastern Heilongjiang province.(Photo by ADEK BERRY / AFP)

President Xi Jinping said China will put in place "more proactive" macroeconomic policies next year, state media reported, as he addressed a top political advisory body on Tuesday.

The country has struggled this year to climb out of a slump fueled by a property market crisis, weak consumption and soaring government debt.

Beijing has unveiled a string of aggressive measures in recent months aimed at bolstering growth, including cutting interest rates, cancelling restrictions on home buying and easing the debt burden on local governments.

But economists have warned that more direct fiscal stimulus aimed at shoring up domestic consumption is needed to restore full health in China's economy, AFP reported.

"We must... further comprehensively deepen reform, expand high-level opening up, better coordinate development and security, (and) implement more proactive and effective macroeconomic policies," state broadcaster CCTV quoted Xi as telling the National Committee of the Chinese People's Political Consultative Conference at a New Year's tea party.

Beijing is aiming for an official national growth target this year of about five percent, a goal officials have expressed confidence in achieving but which many economists believe it will narrowly miss.

"The new quality productivity develops steadily, and annual GDP is expected to grow by about five percent," Xi reiterated on Tuesday.

The International Monetary Fund expects China's economy to grow by 4.8 percent this year and 4.5 percent next year.

Xi's comments came as Chinese authorities released optimistic factory activity figures, a sign that recent stimulus measures may be starting to take effect.

China's Purchasing Managers' Index (PMI) -- a key measure of industrial output -- was 50.1 in December, marking a third consecutive month of expansion, the National Bureau of Statistics said on Tuesday.

The figure was lower than Bloomberg analysts' prediction of 50.2, but still above 50, which indicates an expansion in manufacturing activity.

A reading below that shows a contraction.

The key indicator slid for six months in the middle of the year before returning to expansion territory in October.

The non-manufacturing PMI, which measures activity in the service sector, came in at 52.2 in December, up from 50.0 in November.

"The official PMIs suggest that the economy gained momentum in December, driven by faster growth in the services and construction sectors," Gabriel Ng of Capital Economics wrote in a note to clients Tuesday.

"Increased policy support towards the end of the year has clearly provided a near-term boost to growth," Ng wrote.

Ng noted that export orders in particular rose to a four-month high in December, "probably helped by US importers ramping up orders in advance of potential Trump tariffs.”



Gold Steady as Focus Shifts to US Data for Economic Cues

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)
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Gold Steady as Focus Shifts to US Data for Economic Cues

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)

Gold prices were little changed on Monday, while investors awaited a slew of US economic data including the December nonfarm payrolls report for further guidance on the Federal Reserve's stance on interest rates.
Spot gold held its ground at $2,635.39 per ounce by 0510 GMT. US gold futures dropped 0.2% to $2,646.80.
How the US jobs data fares this week could hold the key to whether gold breaks out of its recent range, said Tim Waterer, chief market analyst at KCM Trade.
"There is a plethora of US data due for release this week (including ISM Services PMI data), and any downside misses could hurt the USD and help gold."
The US jobs report, due on Friday, is expected to provide more clues to the Fed's rate outlook after the US central bank rattled markets last month by reducing its projected cuts for 2025.
Investors are also awaiting ADP hiring and job openings data, as well as minutes of the Fed's last policy meeting for further direction.
Gold flourishes in a low-interest-rate environment and serves as a hedge against geopolitical uncertainties and inflation.
US President-elect Donald Trump is set to return to office on Jan. 20 and his proposed tariffs and protectionist policies are expected to fuel inflation.
This could prompt the Fed to go slow on rate cuts, limiting gold's upside. After three rate cuts in 2024, the Fed has projected only two reductions for 2025 due to persistent inflation.
The US central bank's benchmark policy rate should stay restrictive until it is more certain that inflation is returning to its 2% target, Richmond Federal Reserve President Thomas Barkin said on Friday.
Spot silver was down 0.2% at $29.57 per ounce, platinum dipped 0.7% to $931.30 and palladium fell 0.4% to $918.22.