PBOC Steps Up Economic Dialogue, China Faces 5% Growth Challenge, DBRS Downgrades China's Ratings to 'A', Economists Predict Higher Budget Deficit

The People's Bank of China (PBOC) is intensifying economic dialogue with other countries, aiming to maintain a loose monetary and fiscal policy as China faces challenges from slowing economic drivers including property, infrastructure, and exports. The PBOC advisor stated that China's economic situation is different from Japan's stagnation. DBRS Morningstar downgraded China's long-term foreign and local currency issuer ratings to 'A' from 'A (high)', citing weaknesses in the property sector, challenges from aging demographics, and heightened US-China tensions. Economists predict China may raise its 2024 budget deficit ratio to spur growth, likely setting it at 3.5% of GDP or higher.