China's economic stimulus policies show a clear policy shift that underscores the government's commitment to achieving the gross domestic product growth target of around five percent for 2024, an expert from OCBC Bank has said.
The Political Bureau of the Communist Party of China (CPC) Central Committee held a meeting in September to analyze and discuss the current economic situation and plan future economic strategy.
Tommy Xie, who heads Greater China Research at OCBC Bank in Singapore, told China Global Television Network (CGTN) that the meeting was "one of the game-changers" that could boost confidence and signal a turning point for China's growth prospects.
"The Politburo meeting is really one of the game-changers. I think they are sending a very strong signal that growth is important for them. As we know, usually at the September Politburo meeting they don't talk about economic matters. So, the implied message is – the five-percent growth target is still very important for this year. China will try its best to achieve around five-percent growth target. But now, with this announcement in particular, we are seeing more support for consumers. I think those might potentially translate into growth to stronger growth in the last quarter of the year. That's why I think around five (percent) is still possible," Xie said.
While consumption in China received a boost during the ongoing National Day holiday, Xie believes the period between now and the Chinese New Year will be crucial in determining whether the policy is effective.
"Hopefully we can go back to the five to six percent kind of range in terms of retail sales. But, in terms of the Golden Week Holiday, because those measures were just announced. How fast it can translate to the actual spending? So (that is) the part we need to monitor. I guess for next year, in particular towards the Chinese New Year, that could be the moment of truth, right? We will try to assess how effective those policies are in changing consumer behavior to instill confidence in the consumers. So, I think, from now to the Chinese New Year next year, it will be a critical window to monitor," he said.
As for the medium- and long-term economic outlook, Xie expects innovation and consumption to play increasingly important roles.
"Initially, we do think the economy may slow down to around the 4.5-percent range, or it could be even towards the four-percent range. Because China is facing a number of headwinds in the medium term – whether being an aging society, whether being the still low propensity to consume and also, in particular, the property market. The contribution from the property market is declining. On the other hand, some of the sectors are picking up, for example, EVs, and innovation. If China can really revive that animal spirit, if China can really boost consumption, then that might actually, potentially add another leg to the long-term growth," Xie said.
Stimulus measures signal China's focus on 5-pct GDP growth target: OCBC expert
The European Union should abandon trade protectionism and return to the right track of resolving trade disputes through consultation, rather than disregard the appeals of all parties, according to Li Yong, a senior fellow at the China Association of International Trade.
The European Commission announced Friday that it passed a vote to impose punitive tariffs on Chinese battery electric vehicles (EVs), sparking criticism from several European countries and auto industries who warn the move could boomerang against the European Union's (EU) competitiveness.
In an interview with China Global Television Network (CGTN), Li criticized the EU's anti-subsidy investigation as a typical example of trade protectionism, highlighting its unfair, non-compliant and unreasonable nature.
"Observing the entire process of the EU's anti-subsidy case, both procedurally and substantively, its grounds are unfair, non-compliant and unreasonable. The investigation, first mentioned in the EU's State of the Union address last September, appears politicized. It was launched not based on reported damages by the auto industry but on speculation, which is a hallmark of trade protectionism," Li said.
Li emphasized China's sincerity in the investigation process, expressing the hope that the EU would abandon its protectionist mindset.
"Throughout the handling of the EU countervailing case, China has demonstrated great sincerity, fully communicating with the industry and showing an open and cooperative attitude and greatest flexibility. However, the final draft ruling is disappointing. The opposition of member states and the concerns of the industry have not been respected. In future negotiations, we hope the EU can abandon its protectionist preconceptions, respect the facts and the demands of all parties, and correct its wrongdoing to return to the right track," Li said.
Despite Friday's vote, China remains open to negotiations to reach an agreement and avoid higher tariffs. Countries like Germany and Hungary have voiced strong opposition to the vote, while car manufacturers, including Mercedes-Benz, have indicated that countervailing duties could impair the industry's long-term competitiveness.
The European Commission -- the executive arm of the 27-nation bloc -- maintains that the EU and China are working hard to explore an alternative solution that would be monitorable, enforceable, and fully compatible with World Trade Organization rules.
China says that its position is consistent and clear, firmly opposing the EU's unfair, illegal and unreasonable protectionist approaches in this case.
Amid the row over the EU's controversial tariffs on Chinese EVs, technical teams from China and the EU will resume talks on October 7.
The China Council for the Promotion of International Trade expressed its firm opposition on Saturday, adding that China and the EU should resolve their differences through dialogue in order to reach a solution that aligns with the interests of both parties.
China's Ministry of Commerce on Friday also expressed strong opposition to the EU's decision, considering it "unfair, non-compliant and unreasonable," while acknowledging the EU's political willingness to continue negotiations.
EU should abandon trade protectionism amid row over controversial tariffs on Chinese EVs: expert
