Commentary: CEWC Will Endorse Stronger Policy Support to Counter Headwinds

The CEWC will set the tone for macroeconomic policy in 2025

We expect the upcoming Central Economic Work Conference (CEWC) to recognize the growth headwinds from domestic demand weakness and external uncertainties, although the potential for higher tariffs imposed by the U.S. may not be cited explicitly by the CEWC. Our baseline forecast assumes that a plan for higher tariffs by the new Trump administration may be released in the first quarter of 2025 and implemented in stages starting from the third quarter, potentially indicating a more damaging shock at the end of 2025 and in 2026. Therefore, we think the Chinese government may also ramp up additional policy support in stages in the coming two years — setting a more supportive policy tone for 2025 at the CEWC, announcing most of the concrete stimulus measures at the National People’s Congress (NPC) meeting in March, and rolling out additional stimulus in late 2025 and 2026 as more details of higher tariffs and other developments become available.