China may introduce further economic stimulus measures in the near future.

The Chinese yuan has strengthened rapidly as investors grow increasingly optimistic about potential additional economic stimulus measures from China. Investors are closely monitoring developments at China's annual economic conference, where senior officials will assess the economy for 2025. While maintaining a partially accommodative monetary policy, China is expected to adopt more aggressive fiscal measures to boost both private and public consumption. Efforts will also focus on stabilizing the real estate and stock markets and expanding domestic demand. China's GDP growth is projected at 4.8% in 2024 and 4.5% in 2025.

China's inflation rate fell to 0.2% in November, down from 0.3% in the previous month and below market expectations of 0.5%. This marks the lowest figure since June, highlighting the growing risk of deflation despite recent government stimulus measures that have increased liquidity in the system. Food prices rose minimally, the smallest increase in four months, driven by only slight increases in vegetable and pork prices. However, core inflation, excluding food and energy prices, rose by 0.3%, signaling some positive momentum and supporting continued economic stimulus efforts.

China's trade surplus surged to $97.44 billion in November, up from $69.45 billion in the same period last year and exceeding forecasts of $95 billion. This marks the largest trade surplus since June. Exports increased while imports declined, with imports to China falling by 3.9% to $214.87 billion, marking a second consecutive month of decline due to weak domestic demand and ongoing trade restrictions. Imports of technological products, including semiconductors and integrated circuits, remain critical for China's technological development.

Exports from China grew by 6.7% year-on-year but fell short of market expectations of 8.5% and showed a sharp decline from a two-year high of 12.7% in the previous month. This reflects ongoing trade tensions with the United States and Europe. Nevertheless, Chinese exports expanded for the eighth consecutive month, reaching their highest value in 26 months at $312.31 billion. This growth was partly driven by manufacturers accelerating orders to counter additional tariffs, particularly from the U.S. under the Donald Trump administration. The largest export growth was to the U.S., followed by Japan and the European Union. Key export products remain aluminum materials and plastic products.

The yield on China’s 10-year government bonds fell to 1.83%, with investors awaiting further economic data and the outcomes of the annual Central Economic Work Conference. This indicates that China continues to pursue accommodative measures alongside fiscal policies. However, internal conflicts and sluggish domestic demand remain significant factors stabilizing China's economy through the coming year.