China's Politburo, led by Xi Jinping, has recently announced a shift in their monetary policy strategy for 2025. This change is significant as it is the first one since 2011.

The new approach aims to stabilize the real estate and stock markets while implementing extraordinary counter-cyclical policy adjustments to achieve a targeted 5% growth by 2025. This decision comes in response to concerns over potential US trade policy changes, including a proposed 60% increase in customs duties.

As a result of this announcement, the yuan has shown signs of recovery against the dollar, and Chinese equity indices, such as the Hang Seng Index, have experienced a notable rebound. However, for the Hang Seng Index to maintain its bullish momentum, it needs to close above the critical level of 21,400 points on a weekly basis. It is worth noting that previous attempts to surpass this threshold since 2022 have been unsuccessful, so investors should exercise cautious optimism as they monitor future movements.