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China's Leaders to Discuss Economic Growth Targets and Stimulus Measures
China's top leaders are preparing for the annual central economic work conference on December 11-12 to discuss the GDP growth target and stimulus measures amid economic challenges. While the 2025 growth target is expected to remain around 5%, persistent issues like a housing downturn and weak domestic consumption continue to pressure the economy. Recent stimulus efforts, including interest rate cuts and a $1.4 trillion debt relief package for local governments, aim to bolster growth, but trade tensions with the U.S. and potential tariffs from the incoming Trump administration pose additional risks.
China bonds surge as 10-year yield drops to multi-decade low
China's 10-year bond yield has fallen to a multi-decade low of 1.9636%, driven by expectations of further stimulus measures from Beijing to support the economy, which is projected to grow over 5% this year. The People's Bank of China has injected significant liquidity into the banking system and indicated potential cuts to the reserve requirement ratio. Despite a bond market rally, concerns remain about economic fundamentals and the risk of deflation without meaningful fiscal stimulus.