China may be planning a major economic stimulus.

The yuan has strengthened slightly to about 7.09 yuan per dollar, while investors closely await updates from the Chinese government, as the National People's Congress is set to meet. Investors expect that the Chinese government will reveal further details about fiscal measures to stimulate the slowing economy. Moreover, reports suggest that China might be considering an economic stimulus package worth over 10 trillion yuan to revive its economy amid inflation challenges and ongoing sanctions. However, investors are also watching the upcoming U.S. presidential election closely. A second term for former President Donald Trump could lead to higher tariffs and heightened tensions between the U.S. and China.

China's industrial production grew by 5.4% year-on-year in September, exceeding the forecast of 4.6%, marking an increase from a five-month low. This growth reflects the government's efforts to boost the domestic economy, with the manufacturing sector growing by 5.2%, up from 4.3% in August. Meanwhile, sectors related to railways, shipping, and aviation continued to show robust growth at 13.7%.

China's economy grew by 0.9% in the third quarter of 2024, following a 0.7% increase in the second quarter, marking nine consecutive quarters of growth. This growth is largely driven by government efforts to boost consumption, helping to mitigate risks of deflation and the property sector slowdown.

In terms of monetary policy, the People's Bank of China has introduced significant economic stimulus measures, including substantial cuts to interest and mortgage rates. These central bank efforts have also impacted the domestic stock market, encouraging banks to extend more personal and business loans. According to the National Bureau of Statistics, the Chinese economy remains stable and capable of sustained growth, despite increasingly challenging external conditions. Strong infrastructure development remains a key factor supporting domestic economic stability.

The manufacturing PMI rose to 50.3 in October from 49.3 in the previous month, better than the market expectation of 49.7, indicating factory activity expansion for the first time since stimulus measures were implemented in late September. This led to a swift increase in production, while new orders continued to rise steadily. However, export orders still show signs of a slowdown, though at a slower rate. In terms of employment, there was the sharpest contraction in a year, attributed to rising production costs and intensifying competition, prompting companies to cut labor costs.