China vows ‘more proactive’ fiscal stimulus measures, ‘moderately’ looser monetary policy

China’s leaders on Monday pledged “more proactive” fiscal measures and “moderately” looser monetary policy next year to boost domestic consumption, according to an official readout of a key policy meeting that outlined upcoming economic priorities.

The Politburo, a top decision-making body led by President Xi Jinping, said it will stabilize property and stock markets while strengthening the “unconventional counter-cyclical” adjustment, the Communist Party’s CNBC-translated readout said.

The high-profile meeting has set the scene for an annual Central Economic Work Conference, reportedly due to take place between Dec. 11 and Dec. 12.

During both meetings, top policymakers gather to review economic performance and policy implementation in the current year, while setting priorities for the following one.

The central administration will also discuss its growth target and budget for 2025, partly to give local governments guidance on setting their own targets ahead of the annual parliament session early next year.

While specifics will not be announced until March, it is widely expected that Beijing will keep its next year’s GDP growth target at “around 5%” — the same level that was set for the current year — if not slightly lower.

Chinese state media Xinhua reported late Monday that Xi urged “full preparation” to achieve the country’s economic targets for 2025, despite “many uncertainties and challenges.”

“We must affirm the confidence” and “actively build an external environment that is favorable to us,” Xi said at a symposium on Dec. 6, according to a CNBC translation.

While China’s economy is on track to achieve this year’s growth target, it is still contending with a prolonged housing downturn, tepid domestic consumption and with a potential escalation in trade tensions with the U.S., as President-elect Donald Trump prepares his January return to the White House.

The latest economic data out of China showed the country’s annual consumer inflation fell to a five-month low of 0.2% in November, according to data from the National Bureau of Statistics released Monday.

Hong Kong’s Hang Seng Index reversed earlier losses to jump 2.8% following the readout, while Chinese offshore yuan strengthened modestly to 7.2776 against the greenback.

Hong Kong-traded iShares FTSE China A50 exchange-traded futures surged over 3%.

China’s benchmark 10-year yields meanwhile fell about 2 basis points to 1.935%, a record low, according to LSEG data.