Bank of America says Beijing could roll out additional economic support measures if China’s growth over the past three months came in weaker than policymakers are willing to tolerate, with quarterly data due Monday expected to shape the government’s next move.
Helen Qiao, chief economist for greater China at BofA Global Research, said the upcoming data will help Chinese policymakers decide whether further action is warranted following a “targeted stimulus” package the government delivered in September. Qiao recently traveled to Beijing for discussions, a reflection of how regularly Chinese officials consult foreign banks, BofA among them, on the state of the economy and market sentiment.
Despite the possibility of additional support, BofA’s broader assessment this month leaned toward caution about anything more aggressive. The bank’s economists said China is unlikely to launch a stronger stimulus push unless export growth weakens meaningfully or the country’s fiscal position deteriorates, noting that September’s measures offered targeted support for investment and the property market but stopped well short of a broad policy pivot.
The analysis suggests Chinese policymakers are taking initial steps to stabilize growth while remaining relatively comfortable with current aggregate demand, aided by resilient exports that have reduced the urgency for a larger stimulus package.
Monday's data release will offer the clearest signal yet of whether Beijing sees the current targeted approach as sufficient or whether weaker-than-expected growth numbers push policymakers toward a more forceful response, a decision closely watched by global investors given China's outsized role in global growth and commodity demand.
