Slower China growth builds case for fiscal stimulus

Significance The property sector remained the main drag, although it moved closer to stabilisation. Alongside construction, manufacturing saw the largest slowdown amid deflationary pressures and weak domestic demand. Impacts Global and domestic media report that the anticipated stimulus will be a sizeable renminbi debt issue, which will mostly be spent in 2025. The package will partly be to reduce local governments’ hidden debts; this, while not new investment, will shore up market confidence. Stimulus will aid domestic demand, but external demand will slow amid geopolitical headwinds and historically modest world trade growth.