Policy support buoys full-year growth outlook

China is right on track to meet its full-year economic growth goal as stepped-up policy efforts bolster domestic demand, with sustained growth offering opportunities for foreign businesses amid global economic uncertainty, experts and executives said.

The latest measures, which are targeted in nature, signal a higher priority for stabilizing growth by boosting infrastructure investment, stabilizing the property market and improving people's livelihoods, with ample scope for additional support in the fourth quarter, they said.

Their comments came after Finance Minister Lan Fo'an pledged to ensure existing policies deliver results and devise targeted additional measures to help achieve annual development goals, in an article for Qiushi Journal, a flagship magazine of the Communist Party of China Central Committee.

"We will place greater emphasis on expanding domestic effective demand to maintain stable economic operation," Lan said in the article, which was posted on the Ministry of Finance's website on Thursday.

He called for coordinating government bond funding to support infrastructure and major projects and tapping the unused portion of local government debt limits to strengthen local budgets and investment.

Lan's remarks, together with the recent rollout of targeted stimulus measures, underscore policymakers' commitment to delivering steady growth and strengthening investor confidence, analysts said.

On Tuesday, the ministry, together with other departments, rolled out mortgage subsidies for eligible homebuyers to ease their burden and support essential housing needs.

The People's Bank of China, the country's central bank, also on Tuesday cut the one-year rate on pledged supplemental lending — an instrument for providing large-scale targeted funding — by 0.25 percentage points and expanded its coverage to six infrastructure networks, including computing and next-generation communications, to strengthen support for relevant investment.

"Overall, growth stabilization has been given higher priority to address the economic slowdown since the second quarter," said Wen Bin, chief economist at China Minsheng Bank.

Wen said that economic momentum may strengthen in the fourth quarter, with infrastructure and manufacturing investment to accelerate and support credit expansion, while mortgage subsidies help underpin housing demand.

Stronger growth impetus in September and Tuesday's policy package should help China achieve GDP growth of at least 4.5 percent this year, said Xiong Yuan, chief economist at Guosheng Securities, meeting the annual growth target of 4.5 to 5 percent.

The official manufacturing purchasing managers' index, or PMI, rose to 50.1 in September from August's 49.8, ending two months of contraction, the National Bureau of Statistics said on Wednesday, indicating that manufacturing activity has resumed expansion as stimulus measures took effect.

The outlook comes amid overseas market volatility. US stocks reversed early losses to close higher on Thursday, while US Federal Reserve officials offered differing views on further interest rate increases.

Amid global economic uncertainty, international organizations and foreign companies see China's relatively stable growth and pursuit of high-quality development as sources of confidence and opportunity.

The ASEAN+3 Macroeconomic Research Office, or AMRO, projects that China's economy will maintain stable growth at 4.5 percent in both 2026 and 2027, supported by resilient exports and fiscal measures.

Achim Loeffler, global business leader of Gore-Tex, said China is the US performance materials manufacturer's fastest-growing market, driven by rising demand for high-performance products across outdoor, urban and lifestyle settings.

As a testament to global businesses' confidence in the Chinese economy, equity-based foreign direct investment reached $63.8 billion in the first half, up 55 percent year-on-year, according to the State Administration of Foreign Exchange.

This included a net increase of $43.1 billion in capital, reflecting long-term investment intentions. Foreign companies' reinvested earnings in China rose 31 percent year-on-year as they devoted more earnings to expanding their operations in the country, SAFE said.

Xu Shaofeng, senior vice-president of French conglomerate Schneider Electric, highlighted opportunities from industrial upgrading.

"Whether it is equipment renewals, energy conservation and carbon reduction, or artificial intelligence-driven digital transformation, these all place higher demands on specialized services," Xu said.

Nevertheless, analysts said faster policy implementation and additional support remain key to achieving the full-year growth target.

Yi Huan, chief macroeconomist at Huatai Securities, said increasing the pledged supplemental lending quota would be key to supporting additional bank lending for infrastructure and accelerating project construction.

Wang Qing, chief macroeconomic analyst at Orient Golden Credit Rating International, estimated that tapping the unused local debt quotas could enable about 700 billion yuan ($104 billion) in additional government bond issuance. Interest rate and reserve requirement ratio cuts remain possible if needed, he said.

Contact the writers at zhoulanxv@chinadaily.com.cn