At the top agenda-setting meeting, China emphasizes its plans to increase growth.

• The annual economic work conference of China was held on Wednesday and Thursday, as reported by a daily evening news broadcast on state-run CCTV.
• The recent policy shift, which involves increasing the fiscal deficit next year and implementing a "moderately loose" monetary policy, was affirmed by top leaders.
• An annual parliamentary meeting in March is where China typically reveals its full-year growth target and fiscal deficit.

The Chinese government reaffirmed its recent policy changes and emphasized its plans to increase economic growth during a high-level economic planning meeting that concluded on Thursday, as reported by a daily evening news program on state-run CCTV.

After the close of the mainland China market, the report was released, and the stock rose by 0.8% in premarket trading, before paring its gains.

Chinese President Xi Jinping led an annual economic planning conference that called for proactive fiscal policy, increasing the deficit, and issuing more ultra-long bonds next year, as well as moderately loosening monetary policy by lowering interest rates, according to a state media report.

The Politburo, the second-highest circle of power in the ruling Chinese Communist Party, echoed a sentiment that had not been seen since the global financial crisis in 2008. The use of "moderately loose" monetary policy in a readout signaled a heightened urgency to strengthen China's economy and prepare for a potential trade war with the U.S., as Donald Trump returns to the White House.

An annual parliamentary meeting in March is where China typically reveals its full-year growth target and fiscal deficit.

According to Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, the Thursday report suggests that the government will set a growth target of approximately 5% for the next year, which is the same as this year's target, as stated in the press release.

"Zhang stated that the message about raising fiscal deficit and interest rate cuts is well expected, but the size of stimulus remains uncertain, which will be determined after the U.S. announces tariffs on China's exports."

After taking office in January, Trump intends to impose a 10% tariff on all U.S. imports of Chinese goods.

According to CNBC's translation of the Chinese state media report, China's leaders on Thursday acknowledged an increase in "external challenges" and called for increasing consumption, boosting effective investment, and supporting technological innovation.

JLL's chief economist for Greater China, Bruce Pang, stated that the Thursday meeting revealed a shift in focus from the industrial sector to consumption and investment by top leaders. He emphasized in a note that this pivot highlights the urgent need to strengthen domestic demand in order to effectively manage external uncertainties.

The meeting report mentioned plans to open up China's economy, even if Beijing did not receive anything in return. This year, China has allowed Japanese residents and several other countries to visit for at least two weeks without a visa, while Japan has maintained stricter requirements for Chinese visitors.

Ramp up of policy support

The Politburo on Monday announced plans to implement "more proactive" fiscal tools and "moderately loose" monetary policies in 2025, while increasing "unconventional counter-cyclical adjustments" to stimulate domestic consumption "across all areas," according to a statement by state-owned Xinhua.

"Zhang stated that he views the messages from the economic work conference and Politburo meeting positively. He believes that the shift in policy this week is more significant than the one that occurred in the last week of September."

Since late September, Chinese officials have intensified their stimulus efforts, including cutting interest rates, easing property purchase rules, providing liquidity support for stock markets, and implementing a 10-trillion-yuan ($1.4 trillion) stimulus package to address local government debt problems.

Chinese stocks surged after the initial stimulus announcements, before trading range-bound.

Beijing may increase its stimulus measures to restore growth due to persisting deflationary pressure in the economy, as indicated by recent economic data.

In November, the country's consumer price inflation reached a five-month low, while a deflation in wholesale prices persisted, with the producer price index declining for the 26th consecutive month.

Beijing's intention to increase consumption throughout the year has been emphasized by Chinese authorities. However, only a subsidy program to encourage trading in used household appliances and electronic goods has been implemented as a policy.

It is predicted that Beijing will set its GDP growth target for next year at approximately 5%.

Some economists predict that policymakers may increase the budget deficit target to up to 4% of GDP, which would enable more central government borrowing to stimulate the economy.