- Increasing minimum wages.
- To expand work-maintain programs.
- Facing wages outstanding wages in SME space.
Sunday’s vows followed the commitment of the People’s Bank of China (PBOC) earlier this month, which was for financial support amidst American-China trade tension. Major vows include:
- Cut into interest rates and reserved requirement ratio (RRR) if required.
- Introduction to new policy equipment to run technological innovation, consumption and business.
- Reducing social financing costs by increasing liquidity.
The low interest rate can reduce hostage costs, potentially more affordable homes and free from disposable income for consumers. A low RRR can expand the lending capacity of banks for real estate loans. The low interest rate can also increase consumer demand for large-ticut items including equipment and vehicles.
Consumer confidence and unemployment level challenge 2025 GDP target
While Beijing has continued policy vows, many factors can limit the effectiveness of monetary policy and fiscal stimulation:
- Increasing unemployment: China’s unemployment rate increased from 5.2% in January to 5.4% in February.
- Depressed consumer spirit: China’s Consumer Confidence Index increased from 86.2 in November to 86.4 in December. Despite the growth, the consumer confidence remained with historical upsurge.
Despite the slight increase in consumer trust, further labor market weakness can destroy the spirit. To prevent the effects of stimulation measures, the vanning spirit can reduce consumer expenses.
Expert opinion reflects mixed spirit
Reactions for China’s latest economic indicators are different –
- East Asia Econ: “Summary is a cycle that is not going to deteriorate, but does not even show a clear rebound.”
- Alicia Garcia Herroer, Chief Economist of Natics Asia Pacific: “China’s data in February Was very positive: Industrial production, retail sales and real estate investment were higher than expected. The stock market rally is bound to continue the rally, especially given a mess in the US and foreign investors are already jumping on them (ESD11B in Equity Inflow). ,
- Organization for Economic Cooperation and Development (OECD): “OECD Raise The estimate of 2025 Chinese growth is 4.7%to 4.8%, 2026 forecasting is unchanged at 4.4%. The OECD US 2025 increase estimates from 2.2% to 2.4% and from 2026 to 1.6% to 2.1%. ,
The possibilities of economic growth and China’s policy support have promoted the demand for Hong Kong and mainland China-list shares. Conversely, US markets have faced the intensity of sales pressure in Q1 2025.