At the "China Finance 2025 Annual Conference" held in Beijing on December 7, themed "Finding the Path to China's Economic Breakthrough," Morgan Stanley's Chief China Economist Xing Ziqiang stated that while the overall economy faces significant challenges, China has shown new bright spots, and the capital market has reached a new level. The key to future economic breakthroughs will primarily depend on two paths: developing new quality productive forces and adjusting real estate policies.
Reflecting on China's capital market over the past 15 months, Xing noted that confidence has significantly improved. "Two or three years ago, we analyzed domestic and international experiences and lessons on breaking the low-price cycle trap and mapped out China's path forward. Now, it appears solid progress has been made in breaking conventional thinking, though the pace remains moderate. It may take another year or two of exploration and adjustment," he said.
Xing emphasized that, guided by the direction set in the "15th Five-Year Plan" recommendations, China should firmly focus on technology-driven growth and boosting consumption, particularly by increasing the household consumption rate.
To achieve this goal, Xing proposed two key measures. First, substantial reforms to the social security system should be advanced to alleviate public concerns and unlock consumption potential. Second, more forceful and immediately effective policies should be implemented in the real estate sector to stabilize the market and mitigate the negative impact on consumer confidence and wealth.
He stressed that if these measures are effectively implemented by 2026, the broader economy—including corporate profits and household income expectations—could return to a more favorable positive cycle by 2027.
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