China Eyes 5% Growth Target; Yicai Confidence Index Stable at 50.3

China’s economy appears positioned to meet its 5 percent growth target for the year, with business confidence remaining steady and policy support strengthening, according to a recent survey of chief economists.

The Chief Economists Confidence Index for November stood at 50.3, unchanged from October and staying above the neutral 50 threshold, signaling ongoing confidence in economic stability based on recent survey results.

Following trade talks between China and the United States in Kuala Lumpur, bilateral tensions have eased, with average U.S. tariffs on Chinese goods decreasing by 10 percentage points to 31 percent, explained Cai Wei, director of the KPMG China Economic Research Institute.

Cai noted that this development has positively impacted trade and business sentiment for the upcoming quarter. On the policy side, the government recently announced CNY500 billion (approximately USD70.2 billion) in new policy-based financial instruments along with an additional CNY500 billion in local government bond quotas. Additionally, government bond trading was resumed to inject liquidity into the market.

Supported by both fiscal and monetary measures, domestic demand is expected to rebound in the fourth quarter, making it likely that the annual growth goal of around 5 percent will be met, Cai said.

However, Lian Ping, president of the Guangkai Chief Industry Research Institute, pointed out that China faces continued external challenges.

While tariffs imposed under the Trump administration have been reduced, uncertainty remains, Lian stressed. Domestic consumption also encounters constraints due to limited income growth among residents. He emphasized that investing more heavily in growth stabilization is essential, especially now that the U.S. Federal Reserve’s recent 25 basis point rate cut in October creates room for further monetary easing in China.

Economists anticipate that the recent decline in prices will stabilize. The average forecast for October’s consumer price index suggests a 0.1 percent year-over-year decrease, easing from September’s 0.3 percent fall, while the producer price index is expected to decline 2.2 percent, slightly less than the previous month’s 2.3 percent drop.

The survey projects a 5.7 percent rise in October’s industrial added value, slowing from 6.5 percent in September. Retail sales of consumer goods are expected to increase by 2.7 percent, down from 3 percent last month. Fixed-asset investment for the first ten months is projected to decline 0.8 percent year-over-year, slightly widening from the 0.5 percent decrease seen previously.

Exports and imports are expected to grow by 2.6 percent and 3.1 percent, respectively, both lower than September’s growth rates of 8.3 percent and 7.4 percent. The trade surplus is forecasted to expand to USD94.3 billion from USD90.5 billion in September. New loans and overall social financing are expected to reach CNY454.9 billion (about USD63.9 billion) and CNY1.3 trillion (roughly USD182.5 billion), respectively, both significantly below September’s official figures of CNY1.3 trillion and CNY3.5 trillion.

Fourteen economists participated in the survey.