China Economic Activity and Policy Analysis

This technical report provides an analysis of recent economic activity in China, focusing on data from October 2023. It outlines the mixed performance of key economic indicators, highlighting improvements in retail sales and services, while noting ongoing vulnerabilities in the property sector. The report details how policy measures are gaining traction, with a revised China Financial Conditions Index indicating looser financial conditions than previously estimated. It discusses the potential impact of a rumored RMB 1 trillion funding program for urban redevelopment and the issuance of special central government debt on economic stability. The report also presents a cautiously optimistic growth forecast for 2024, projecting a GDP growth rate of 4.4%. The authors emphasize the need for continued policy support to bolster market confidence and mitigate risks associated with the economic outlook.