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China to unveil much-anticipated economic stimulus package

China is expected to announce much-anticipated steps to boost its flagging economy at the end of this week's meeting of its legislature on Friday

Ken Moritsugu,Zen Soo
Thursday 07 November 2024 19:56 EST

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China is expected to announce much-anticipated steps to boost its flagging economy Friday at the end of this week's meeting of its legislature.

Analysts say bold, multi-trillion yuan measures are needed to reinvigorate the world's second largest economy, which has yet to bounce back fully from the COVID-19 pandemic.

The central bank loosened restrictions on borrowing in late September, sparking a stock market rally, but economists say the government needs to do more to ignite a sustained recovery. Government officials have indicated that could come at this week's meeting of the Standing Committee of the National People's Congress, which must give official approval to any new spending.

The economy has shown signs of life in the last two months. Purchase subsidies offered to people who trade in old cars or appliances for new ones helped auto sales rebound in September. A survey of manufacturers turned positive in October after five straight months of decline, and exports surged 12.7% last month, the largest increase in more than two years.

For most of the year, the ruling Communist Party appeared more focused on addressing long-term structural issues with the economy rather than short-term ones. Previous steps to boost the economy were piecemeal, seemingly aimed at keeping the economy afloat rather than sparking a robust recovery.

In recent weeks, the party has signaled a growing concern about the economy's sluggishness as it tries to meet its goal of achieving growth of around 5% this year. The central bank's monetary easing was followed by government pronouncements that it still has ample funds to pump into the economy.

Still, the longer-term goals of transforming China into a high-tech and green energy economy seem likely to remain the chief aims of the Communist Party, which doesn't face election pressures like the ones that toppled the Democrats and swept Donald Trump's Republicans to power in America this week.

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AP Business Writer Zen Soo contributed from Hong Kong.

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