China signals fresh stimulus as slowdown threatens growth target

China’s cabinet has promised a new package of economic measures and pledged to study steps to stabilize the property market, signalling greater urgency as growth threatens to miss the government’s annual target.

After a State Council meeting chaired by Premier Li Qiang on Monday, authorities said they would “put in place a package of practical and effective additional policies” and “strengthen counter-cyclical adjustments” to meet 2026 economic and social goals. Unused local-government bond quota from prior years will be tapped, and the central bank’s relending allowance raised to support innovation, technical upgrades, small firms and agriculture. Officials also said they will study measures on housing, employment and household income.

Growth reached 4.3 per cent in the second quarter; economists say the third quarter likely slipped below the lower end of Beijing’s 4.5-to-5 per cent annual target as consumption softened near zero in August and investment slumped. ING’s Lynn Song said more support is likely in coming weeks; BNP Paribas’s Jacqueline Rong said stimulus is needed in the fourth quarter to bridge the gap to the 4.5 per cent floor.