Abstract: Recently, the China Finance 40 Forum and the China Center for International Economic Exchanges jointly held the 6th Bund Summit, during which a closed-door seminar was convened on the topic of China's Macroeconomic Outlook for the Second Half of 2024.
Experts at the seminar unanimously agreed that the most prominent issue facing China's economy remains the insufficient effective demand. The lingering impacts of the pandemic, ongoing contraction in the real estate market, and weaker-than-expected macroeconomic policy efforts are cited as the main reasons for this shortfall.
Experts highlighted the secondary harms of inadequate overall demand, such as the deterioration of the business environment in some regions. In an environment of insufficient demand, young people and newly established small and micro businesses are the most vulnerable. Stabilizing spending and credit, which requires a leading role from the government, is key to addressing this issue.
Therefore, the majority of experts recommended that increasing fiscal efforts is the most crucial measure to tackle insufficient demand at this stage. Fiscal expenditures should aim to meet the budget targets set at the beginning of the year, and, if necessary, increase the general public budget deficit. It is also suggested to continue reducing policy interest rates and, if necessary, utilize the central bank's balance sheet management capabilities. Additionally, efforts should be made from both supply and demand sides to stabilize the real estate market as soon as possible.
