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Excerpts from DBS report
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What’s New
On Monday, China held a Politburo meeting to set policy directions for 2025. The top leadership sent a positive tone for the stimulus in the new year, evidenced by
- Calling for more proactive macroeconomic policies (实施更加积极有为的宏观政策)
- Pledging “unconventional” counter-cyclical policy adjustment (加强超常规逆周期调节)
- Changing monetary policy stance from “prudent” to “moderately accommodative” (适度宽松的货币政策), the first time since July 2010, and strengthening fiscal policy stance to “more proactive” (更加积极的财政政策)
- Prioritizing boosting consumption, improving investment efficiency, and comprehensively expanding domestic demand ahead of promoting the development of new quality productive forces (大力提振消费、提高投资效益，全方位扩大国内需求)
- Clearly calling for stabilizing property and stock market (稳住楼市股市)
Our take
Stronger tone on policies. The policy tone delivered at the Politburo meeting exceeded both our expectations and those of the market, highlighted by phrases such as “unconventional” policy adjustments and the shift from a “prudent” to a “moderately accommodative” monetary policy stance.
We view this as a positive signal, reflecting top leaders’ commitment to stabilizing the economy and restoring market confidence, as it addressed key investors’ concerns like sluggish consumer demand and the property market downturn.
That said, it is important to note that a stronger policy tone does not imply a "bazooka" stimulus for property and stock market, as the emphasis on stability remains clear in the meeting readout.
| "Our current estimate for fiscal support remains unchanged at this point: 1) official budget deficit at 3.8% to GDP, 2) Rmb2 Tn special sovereign bonds and 3) Rmb4.5 tn local govt special bonds." -- DBS |
What would truly make the stimulus “unconventional”?
Year-to-date, there have been several instances where policy actions have fallen short of heightened investor expectations, so we believe more concrete numbers or magnitude on the size of the fiscal support in 2025 will be crucial for extending this sentiment-driven rebound.
While our base case remains that the Central Economic Work Conference will not officially disclose specific targets for the new year, we will closely watch any official indication on the size before the Two Sessions in March next year.
Market implication. We reiterate our positive view over Hong Kong and China stocks in 2025 and suggest staying in the market to await upcoming CEWC.
Policy beneficiaries in
1) consumption, such as Anta (2020 HK), CR Beer (291 HK), Haidilao (6862 HK) and
2) property, such as Yuexiu (123 HK) and CR Land (1109 HK)
will receive short-term sentiment boost.
We also updated our policy beneficiaries table below.
Fig: DBS buy-rated policy beneficiaries with price below Sep 24 policy pivot (Dec 6 close) 
Source: DBS
See DBS Research report here.
