China pledges to maintain fiscal stimulus to support growth next year amid contradictions in economic model
China's leadership committed to maintaining proactive fiscal policy in 2025 targeting approximately 5% economic growth, but the dual focus on consumption and investment reveals Beijing's reluctance to fundamentally shift from its production-driven export model.
Insights:
Chinese leaders promised on Thursday to maintain a proactive fiscal policy next year that would stimulate both consumption and investment to maintain high economic growth, which analysts expect Beijing to target at roughly 5%. The pledges were published in a readout by state news agency Xinhua of the annual Central Economic Work Conference held December 10-11, a key gathering of the Communist Party to set the policy agenda and targets for next year.
The prospect of forceful fiscal stimulus could ease worries over the slowdown seen in the second half of the year in almost every area of the economy that is not contributing to China's 
CN trillion-dollar trade surplus. But the dual, contradictory, focus on consumption and investment cements concerns that Beijing is not yet ready to shift from a production-driven economic model to one that leans more on household spending - a decades-old imbalance that many economists say threatens long-term growth for the sake of maintaining a high, short-term pace.
CN trillion-dollar trade surplus. But the dual, contradictory, focus on consumption and investment cements concerns that Beijing is not yet ready to shift from a production-driven economic model to one that leans more on household spending - a decades-old imbalance that many economists say threatens long-term growth for the sake of maintaining a high, short-term pace.
