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Huawei reported a revenue of over 860 billion yuan (approximately US$120 billion) for 2024, marking a 22% increase from the previous year. The government and enterprise sector saw a revenue boost of over 25%, reflecting the company's strategic focus on the domestic market amid changing conditions.
China's recent work report highlights a strong focus on boosting domestic demand and consumption amid rising tariffs and a record budget deficit of 4%. Policymakers aim to stabilize growth through fiscal expansion and innovation, while maintaining open trade relations, particularly with the U.S. The report outlines significant fiscal measures, including ¥1.3 trillion in special Treasury bonds to support infrastructure and consumer spending, reflecting a commitment to address local government financing gaps and stimulate the economy despite external trade pressures.
UBS has maintained its 2025 GDP growth forecast for China at 4%, despite new US tariffs expected to impact exports and domestic investment. The Chinese government is anticipated to enhance policy support to bolster domestic demand, while the yuan may weaken against the dollar, though proactive depreciation is not expected.
China's economy shows signs of recovery, particularly in retail and property sales, aided by government stimulus and local spending. However, challenges remain, including potential tariffs and currency pressures, which could impact exports and domestic investment. The upcoming National People's Congress is expected to outline further policy support to stabilize growth.
China is taking measures to slow the depreciation of the yuan, which is under pressure from a strong dollar and US tariff threats. UBS's chief economist warns that while a weaker yuan could modestly boost exports, it may lead to competitive currency devaluations among China's rivals. The government is ramping up efforts to stabilize the currency amid concerns over capital outflows and financial instability, especially with potential tariffs from the incoming Trump administration threatening trade.
China is expected to implement a broad stimulus to counteract the impact of US tariffs, as the yuan faces downward pressure from a strong dollar and tariff threats. UBS Group AG's chief economist noted that while a weaker yuan could provide a slight boost to exports, it may prompt competitors to devalue their currencies, negating the benefits.
China's central bank has maintained its medium-term lending rate at 2.0% to stabilize the yuan amid pressures following the U.S. presidential election. The People's Bank of China aims for gradual policy adjustments, with expectations of potential reserve requirement ratio cuts and a cautious approach to interest rate changes as it navigates economic challenges. The offshore yuan has depreciated over 3% since late September, prompting discussions on balancing economic revitalization with exchange rate stability.
China is poised to implement a significant spending package to support its economy, with UBS predicting an expanded fiscal deficit of 2% of GDP in 2025, amounting to over 2 trillion yuan ($276 billion). Wang Tao, chief China economist at UBS, indicated that the government has the capacity for bolder actions, including income and consumption subsidies, potentially announced during the National People's Congress in March.
The 22nd Greater China Conference, themed "A New Horizon: People, Planet, Prosperity," attracted over 3,800 attendees, including 2,500 investors and 278 companies. Key discussions centered on China's economic growth drivers, common prosperity, and sustainable finance, featuring insights from prominent figures like Ray Dalio and Professor Daniel Kahneman. The event highlighted the importance of digital transformation, new energy, and regulatory reforms in shaping China's future.
UBS anticipates a strong rebound in China's economic momentum for Q4, driven by significant fiscal support. With retail sales and production improving in October, GDP growth is projected to exceed 6% quarter-on-quarter, potentially lifting annual growth close to 5%. Additional policy measures are expected to bolster growth into 2025 amid challenges like a property slowdown and US tariff uncertainties.
Wang Tao
People
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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