Commentary: ‘Moderately Loose’ Monetary Policy, Proactive Fiscal Measures Key to Reviving China’s Economy

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The economic stimulus measures discussed at the Politburo meeting on Monday included use of the term “moderately loose” to describe the country’s monetary policy stance. The term was last used during the global financial crisis. Photo: VCG

The economic stimulus measures discussed at the Monday Politburo meeting can be summarized in two words: extraordinary and comprehensive. Below are some quick takeaways.

The meeting shows that China is bracing for uncertainty with policy resolve. The phrase “strengthening extraordinary countercyclical adjustments” was introduced for the first time, signaling policymakers’ strong determination to stabilize growth, shifting from a passive to a proactive response.

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China's recent Politburo meeting emphasized proactive economic measures with a focus on stabilizing growth, boosting domestic demand, and adopting a moderately loose monetary policy for the first time in 14 years.
Potential reductions in policy rates and bank reserve requirement ratios are anticipated, alongside increased fiscal spending, particularly in real estate and public investments.
The focus is on infrastructure investment, regional strategy, and enhancing industrial supply chains, with the aim of mitigating systemic risks and boosting economic resilience.

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