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Beijing:
As China's economy struggles, officials in Beijing have the arduous task of formulating a policy response that can ensure sustainable growth in what promises to be a challenging year ahead.
Sluggish domestic spending, a years-long property market slump and the prospect of an intensified trade war after US President-elect Donald Trump takes office next week are among the considerable hurdles facing the world's number two economy.
In the face of myriad pressures, Beijing has since September announced a string of its most aggressive economic support measures in years.
Here are the key steps taken recently:
Consumer subsidies
China nearly slipped into deflation in December, in a further sign of lacklustre spending since the cancellation of stringent anti-pandemic measures in late 2022.
To encourage spending, authorities have expanded a scheme allowing consumers to replace old household appliances at a subsidised price to include items such as dishwashers, rice cookers and microwave ovens.
Similar policies have also been implemented for tech products like smartphones, tablets and smartwatches.
Such programmes intended to shore up consumption have "already demonstrated their effectiveness in recent months", Agatha Kratz of Rhodium Group told AFP.
Rate cuts
China's central bank cut two key interest rates to historic lows in October, just days after the country posted its lowest quarterly growth in 18 months.
The one-year Loan Prime Rate (LPR), which constitutes the benchmark for the most advantageous rates lenders can offer to businesses and households, was cut from 3.35 percent to 3.1 percent.
The five-year LPR, the benchmark for mortgage loans, was cut from 3.85 percent to 3.6 percent.
Central bank officials have signalled that 2025 will likely bring further rate cuts under a shifted "moderately loose" stance towards monetary policy.
The People's Bank of China (PBoC) reiterated plans to cut interest rates and the reserve requirement ratio, which dictates how much banks must hold in their coffers, rather than lending or investing.
Encouraging homebuyers
China's property sector once represented a pillar of the national economy, fuelling a construction boom that coincided with a period of rapid urbanisation.
But the industry slumped as it was hit by a government crackdown on lending, with several top developers mired in debt and on the brink of collapse as wary consumers hold off on purchasing homes.
Beijing in November announced a raft of policies intended to boost the ailing sector, including lowering deed tax rates for certain first and second homes in four major cities including Beijing and Shanghai.
Cities across the country have also announced various relaxations to purchasing restrictions in recent months, once implemented to limit harmful speculation.
More debt
A key issue that continues to plague the Chinese economy is the high level of debt saddling local governments, which once borrowed large sums to fund infrastructure projects in a relatively lax regulatory environment.
But those authorities today are running out of infrastructure needs to meet, which means that newer projects, like extra bridges and conference centres, tend to make less money back as there is little demand for them.
Beijing in November approved a plan to swap six trillion yuan ($818 billion) of hidden debt belonging to local governments for official loans with more favourable terms.
The debt swap plan will raise the local government debt ceiling every year from 2024 to 2026, a move policymakers hope will free up resources and ease the burden.
Bonds for buildings
Authorities announced in October that local governments would be issued special bonds enabling them to acquire unused land for development.
The move would "help ease liquidity and debt pressures on local governments and real estate companies", vice finance minister Liao Min explained at the time.
But analysts are sceptical that the debt-hit property sector will fully recover this year, with "no quick fix" in sight, said Lisheng Wang, China economist at Goldman Sachs, to AFP.
"Property prices and home transactions have started to react to the latest policy easing measures, which include funding support for unfinished projects," said Betty Wang of Oxford Economics.
"However, we remain cautious about a recovery in the sector," said Wang.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
