China's economy appears to have found a floor in the third quarter of 2023, but the recovery remains tepid. Policy stimulus has been targeted rather than aggressive, leaving growth momentum weak.
Growth Stabilization
After a disappointing second quarter, indicators suggest growth is stabilizing. Manufacturing PMI has returned to expansion territory, and retail sales are showing modest improvement.
Policy Response
Beijing has rolled out incremental support measures including:
- Interest rate cuts and reserve requirement reductions
- Property sector relaxation measures
- Infrastructure investment acceleration
- Consumption promotion campaigns
However, these measures are seen as insufficient to drive a strong recovery, reflecting Beijing's reluctance to repeat the massive stimulus of 2008-09 or 2015-16.