US banks are more optimistic about China’s economy, after the country launched a series of fiscal and monetary stimulus policies since September.
In a report on October 13, Goldman Sachs bank (USA) expected China’s GDP to grow by 4.9% this year, higher than their latest forecast of 4.7%. The following year’s figures also improved, from 4.3% to 4.7%.
“China’s latest round of stimulus clearly shows that officials have made a turning point in policy and are increasingly focusing on the economy,” said Hui Shan – an economist at Goldman.
Goldman Sachs’ move comes as economists and investors are evaluating the potential impact of a series of stimulus policies that Beijing has launched since the end of September. The world’s second largest economy The world is currently facing deflationary pressure and weak consumer sentiment. In the second quarter, China’s GDP increased by 4.7%, slower than the beginning of the year and lower than analysts’ forecasts.
People outside a shopping mall in Shanghai (China). Image: Reuters
The Central Bank of China (PBOC) has so far reduced the required reserve ratio for banks, lowered home loan interest rates and reference interest rates. Last week, China’s Economic Development and Reform Commission (NDRC) also said it would allocate 200 billion yuan (28 billion USD) for local investment projects this year, one year earlier than planned. . China’s Ministry of Finance pledged to increase fiscal support.
According to Goldman’s report, China allowing local governments to issue bonds to mobilize 2,300 billion yuan (325 billion USD) in the fourth quarter is a stronger move than expected. This shows that officials increasingly rely on fiscal spending to support the economy. Goldman Sachs believes that Beijing is trying to achieve its growth target of around 5%.
The Bank of America also estimates that new policies will offset the drag from slowing exports and the prolonged real estate crisis. Still, they warn that China’s structural challenges remain. Therefore, growth in 2026 and beyond remains unchanged.
“Challenges from population structure, financial leverage reduction strategies and the trend of shifting global supply chains are difficult to reverse with loosening policies alone,” economists concluded.