MARKET OVERVIEW - China's Continued Efforts to Boost Domestic Demand Likely

Bank of America economists Helen Qiao and Xiaoqing Pi stated that China will continue its efforts to boost domestic consumer demand in 2025. The economists noted that while markets are focused on consumer subsidies, the communiqué from the Central Economic Work Conference (CEWC) included an expansion of the scope of durable goods exchange programs. They expressed, "In our view, this indicates that policymakers will not only continue to provide subsidies for home appliances and automobiles but also offer cash incentives for a broader range of consumer products and services in 2025." The economists also emphasized that it is expected for senior policymakers to refrain from including quantitative policy targets while committing to increasing the deficit and lowering interest rates at the CEWC.