China Trade Data Misses Forecasts as Demand Weakens: Stimulus Crucial

The trade data came on the heels of Beijing’s renewed pledge to support China’s economy. On Monday, December 9, the Politburo announced plans to loosen monetary policy in 2025 and implement fresh stimulus measures targeting consumption and broad-based domestic demand.

Expert Reactions to Beijing’s Policy Direction

On Monday, two-times economist of the year Hai Hong reacted to Monday’s Politburo announcement, saying,

“Only in 2008/2009 during the global financial crisis did China use words such as “moderately loose policy”. The meeting reiterates stabilizing the housing and the property market, as previous politburo meeting in September did. It also mentions “stimulating consumption” before “promoting investment”.

November’s trade data underscored the need for policy measures to bolster China’s economy. The Politburo’s announcement was timely. The Aussie dollar and the Hang Seng Index showed limited reaction to the weak data.

The Market Reaction to the China Caixin Services PMI

Ahead of the release, the Hang Seng Index advanced by 1.06%, extending its gains from Monday.

Following the trade data, the Hang Seng Index was up 1.07% to 20,632.