China signals looser policy, backs 5% growth target

The Chinese Politburo, which heavily influences the People’s Bank of China (PBoC), announced plans to adopt a “moderately loose” monetary policy in 2025, signaling a notable shift from the “prudential” approach maintained since 2011.

China signals looser policy, backs 5% growth target

This announcement before the Central Economic Work Conference also highlighted plans for increased fiscal stimulus and pledges to support property and equity markets next year. These moves underscore the government’s commitment to accelerating countercyclical measures to address economic challenges and sustain its ambitious 5% GDP growth target for 2025.

PBoC holds lending rates at record lows

Meanwhile, the PBoC kept its key lending rates unchanged in its latest fixing. The one-year loan prime rate, the benchmark for most corporate and household loans, remained at 3.1%, and the five-year rate, a reference for property mortgages, stayed at 3.6%. Both rates are at record lows following cuts in October and July.