Unconventional monetary steps eyed

The skyline of Beijing. China may take unconventional monetary steps to finance bolder fiscal expansion next year as a top-level meeting has marked a rare shift in policy stance to navigate intensified uncertainties, policy researchers and economists said on Tuesday. Hu Yifan, head of macroeconomics for Asia-Pacific at UBS Global Wealth Management, said that strengthening fiscal stimulus would be key for China to offset tariff threats from the United States in 2025, with trillions of yuan in additional central government debt likely needed in the coming years for housing market destocking and social protection enhancement. Hu's remarks came after the Political Bureau of the Communist Party of China Central Committee held a meeting on Monday to analyze and study economic work in 2025 and the top leadership called for a more proactive fiscal policy and a moderately loose monetary policy, marking a shift from the "prudent" monetary stance for the first time since China dealt with the 2007-09 global financial crisis. According to analysts, Monday's meeting underlined for the first time ever strengthening "unconventional countercyclical adjustments", which economists said refer to measures other than interest rate cuts and RRR reductions that can involve closer monetary and fiscal policy coordination.