Why It Matters: China will remain reliant on goods trade-in programs as its primary form of consumer stimulus, and despite an expansion of the scope of these programs and the scale of overall Chinese stimulus in late 2024, this suggests dragging Chinese consumption will not significantly recover in 2025. Rather, Beijing will continue to focus most of its stimulus efforts on defusing debt risks and bolstering investment, primarily in the form of infrastructure funded by expanded issuances of local government special purpose bonds. Without a major recovery of the real estate and export sectors, consumption will very likely remain weak compared with the five years pre-COVID-19 (2015-2019), when China's annual retail sales growth rate averaged 8%-11%. Real estate sales are expected to stabilize in 2025 after dropping significantly for two years, but rapid expansion is still not expected. Meanwhile, export headwinds will only grow due to Western (especially U.S.) trade restrictions, suggesting a major uptick in export industries (and in related employment) is also not impending....
