The Chinese yuan has weakened to 16-month lows, influenced by a strong dollar and fears of increased trade barriers, reflecting market uncertainty about the economic outlook.

Economic strategists advocate for deeper interest rate cuts and robust fiscal policies to maintain momentum amid geopolitical uncertainties and changing U.S. trade policies.

Analysts remain cautious about the overall impact of the stimulus, with more details expected to emerge after the annual parliamentary sessions in March 2025.

China's economy demonstrated a year-on-year growth of 5.4% in the fourth quarter of 2024, exceeding expectations of 5% and showing improvement from 4.6% in the previous quarter.

Despite this growth, concerns linger over weak domestic demand and the looming threat of potential U.S. trade tariffs under President-elect Donald Trump.

The government's stimulus measures are part of a broader strategy to address the severe property crisis that has diminished consumer wealth and spending.

Despite extensive government support in 2024 to boost consumer spending, analysts emphasize that additional efforts are necessary to enhance consumption amid uncertain external trade conditions.

In response to economic challenges, policymakers have introduced a substantial 10 trillion yuan ($1.4 trillion) debt package for local governments, alongside interest rate cuts aimed at stimulating the economy.

The National Bureau of Statistics has raised alarms about increasing external pressures and insufficient domestic demand, calling for more effective macroeconomic policies.

Retail sales have shown a significant slowdown, increasing only 3.5% in 2024 compared to over 7% in 2023, indicating a persistent lack of consumer confidence.

The ongoing crisis in the Chinese real estate market, characterized by falling property prices, has severely impacted consumer spending and overall economic activity.

Economists predict that the real estate slowdown will continue to hinder growth for several years, exacerbated by a high savings rate among consumers.