China’s Leaders Pledge to Implement More ‘Relaxed’ Monetary Policy in 2025

Chinese President Xi Jinping and other top leaders announced on Monday that they would adopt a more “relaxed” approach to monetary policy as they outlined plans to boost the economy in the coming year.

The world’s second-largest economy is grappling with sluggish domestic consumption, an ongoing crisis in the property sector, and rising government debt—factors that threaten Beijing’s official growth target for this year.

Leaders are also keeping a close eye on Donald Trump’s potential second term in the White House. The president-elect has indicated that he will revive his aggressive trade policies, raising concerns about a renewed standoff between the superpowers.

State news agency Xinhua reported that on Monday, the Politburo, the country’s top decision-making body, “held a meeting to analyse and study the economic work of 2025.”

“We must vigorously boost consumption, improve investment efficiency, and comprehensively expand domestic demand,” Xinhua quoted officials as having said.

“Next year we should… implement a more active fiscal policy and an appropriately relaxed monetary policy,” they added.

Since September, Beijing has introduced a series of measures to boost growth, including cutting interest rates, lifting restrictions on homebuying, and easing the debt burden on local governments.

In October, the central bank announced it had reduced two key interest rates to historic lows.

However, economists have cautioned that more direct fiscal stimulus, focused on boosting domestic consumption, is necessary to fully recover China’s economy, especially as concerns over a renewed trade war with the United States grow.

Highlighting the ongoing sluggish consumption in China, official data released on Monday showed that consumer price growth slowed in November.

The consumer price index, a key measure of inflation, rose by just 0.2 percent, down from 0.3 percent in October, according to the National Bureau of Statistics. This figure was below the 0.4 percent forecast in a Bloomberg survey of economists.

In addition, Beijing’s leadership announced plans to intensify its anti-corruption campaign, emphasizing a “high-pressure posture in punishing” graft.

Xi has led a broad campaign against official corruption since coming to power over a decade ago, though critics argue it also serves as a means to eliminate political rivals.

Recent efforts have particularly targeted the military, with top official Miao Hua last month joining a number of high-ranking figures who have been removed from their positions over the past year.

On Monday, officials pledged to “strengthen the mechanism for investigating and addressing unhealthy practices and corruption.” They also called for China to “deepen integrated efforts to rectify unhealthy practices and combat corruption,” according to state media.