NPC Standing Committee Closes Today... Stimulus Package Size Draws Attention Ahead of Trump Administration

The Standing Committee meeting of the National People's Congress (NPC) of China will conclude on the 8th after a five-day schedule. The biggest point of interest is the extent of the economic stimulus measures to be announced. Following the victory of Donald Trump, who campaigned on large-scale tariffs in the recent U.S. presidential election, there is speculation that the stimulus package China will unveil could be larger.

Chinese state media are expected to report the results of the 12th meeting of the 14th NPC Standing Committee this afternoon. The NPC Standing Committee, which functions as a de facto parliament, holds the authority to approve fiscal stimulus measures by the central government of China. Since September 24, the Chinese government has successively announced stimulus measures centered on liquidity supply, interest rate cuts, and capital injections to stabilize the stock market, starting with a stimulus package from financial authorities, but it has not disclosed the scale of fiscal stimulus including the issuance of special government bonds.

Liao Min, Deputy Minister of Finance of China, said in an interview with Bloomberg last month, "The recent series of stimulus measures aim to boost domestic demand to achieve the annual economic growth target," and predicted that "the scale of fiscal stimulus will be quite large." At the end of last month, reports also emerged that China is considering approving a stimulus package totaling 10 trillion yuan (approximately 1937 trillion won) over several years, including a 6 trillion yuan budget to resolve local government debt. This amounts to about 8% of China's gross domestic product (GDP).

To finalize the scale of the stimulus package, legal procedures must be followed at the NPC Standing Committee meeting, the highest decision-making body. Notably, China postponed the NPC Standing Committee meeting beyond the usual date and appeared to closely monitor the U.S. presidential election held on the 5th. This move was interpreted as a consideration of scenarios such as the victory of then-Republican candidate Trump, who pledged tariffs exceeding 60% on Chinese imports. Trump had also signaled a tough policy stance toward China beyond large-scale tariffs. Therefore, there is interest in how much the results of today's meeting, announced after the confirmation of the U.S. election winner, will include countermeasures for the second Trump administration.

Earlier, Bloomberg cited Macquarie economists estimating that China might need a stimulus package worth 3 trillion yuan (approximately 582.69 trillion won) to offset the impact of a 60% high tariff. Additionally, Macquarie analyzed that an additional 3 trillion yuan would be necessary to overcome domestic demand sluggishness. According to the National Bureau of Statistics of China, the economic growth rate in the third quarter this year was only 4.6%. The cumulative growth rate from the first to the third quarter also remained at 4.8%, leading to widespread speculation that the 5% target will be difficult to achieve.