China's stimulus measures are not having a significant impact on the economy.

• The latest growth initiatives in China are slowly making their way through the economy, as indicated by data and company earnings.
• According to a recent earnings call recording, Meituan CFO and senior vice president Shaohui Chen stated that although it may take time for the positive impact to fully manifest and expand to additional consumption categories, they are optimistic that these policies will gradually enhance support for the real economy.
• According to Gabriel Wildau, managing director at Teneo, sources predict that the stimulus in 2025 will be released gradually and based on data.

Despite China's recent efforts to stimulate growth, data and company earnings suggest that the world's second-largest economy is not experiencing a significant impact yet, indicating that a quick recovery is unlikely.

Since Beijing announced stimulus measures in late September, growth in pockets from real estate to manufacturing has improved. Nevertheless, companies have been cautious when sharing their outlooks in the past few weeks.

During the earnings call on Friday, the food delivery giant stated that the average hotel order value in its newer travel booking business decreased less in October compared to the previous months, on a year-over-year basis.

According to a recording of the earnings call, Meituan CFO and senior vice president, Shaohui Chen, stated that although it may take some time for the positive impact of the policies to fully manifest and expand to more consumption categories, they are confident that these policies will gradually offer more support for the real economy and motivate consumer spending, creating more growth prospects for the business.

In their earnings calls last month, executives from an e-commerce company and a social media operator expressed similar views, stating that it would take time for stimulus to result in growth.

The increase in stimulus measures is aimed at achieving this year's target of approximately 5%, and a similar pace next year, while preventing financial instability, according to Gabriel Wildau, managing director at Teneo, who stated in a note Monday that the tone on the economy suggests that "technological self-sufficiency and national security remain the top priorities" for China.

"According to Wildau, our sources predict that the stimulus in 2025 will be released gradually and based on data, with a focus on providing "just enough" rather than taking "whatever it takes.""

The preliminary economic indicators for November suggest a moderate improvement in growth.

The Caixin purchasing managers' index for manufacturing showed a further expansion in factory activity with a print of 51.5, its highest reading since June, according to LSEG data. Meanwhile, the official PMI came in at 50.3, the highest since April. Retail sales and industrial data for November are due on December 16.

Caixin's measure of manufacturing labor revealed a third consecutive month of employment contraction in November, indicating that the impact of economic stimulus on the labor market is still not evident and businesses need to enhance their confidence in expanding their workforce.

"Wang stated that although the economic downturn seems to be stabilizing, it requires additional consolidation, as there is a growing risk of "external uncertainties.""

On Monday, the U.S. issued new restrictions targeting Chinese chipmakers, following President-elect Trump's announcement of 10% tariffs on all U.S. imports of Chinese goods effective in January.

Chinese businesses are eager for more stimulus as geopolitical tensions increase, according to a survey by U.S.-based advisory firm China Beige Book released Monday.

Despite "widespread" weakness in consumption of services, retail spending and home sales improved from a year ago, and the share of respondents borrowing more rose to the highest since May 2022, indicating a pickup in demand, according to a report that surveyed 1,502 companies from Nov. 14 to Nov. 26.

"The report stated that Beijing's stimulus measures prompted firms to become active this month. However, it is unlikely to persist without promises of further support."

The Ministry of Finance in China has stated that additional fiscal support may be provided next year. Additionally, investors are closely monitoring the annual economic planning meeting, which usually takes place in mid-December, for further details.