The Chinese economy is currently under close scrutiny, with concerns raised over, for example, downward pressures and fluctuations in the property market. But a broader perspective indicates China's economic fundamentals remain strong. Following the recent implementation of additional policies to boost economic recovery, market sentiment has improved markedly. 

In late September, the People's Bank of China, the country's central bank, announced a reduction in the reserve requirement ratio (RRR), injecting long-term liquidity into the financial market. The RRR, or the proportion of deposits that banks must hold in reserve, serves as a monetary tool. By lowering this ratio, the government increases available funds for financial institutions, reduces their liability costs and helps ease financing costs for the real economy.

At the same time, many cities lifted or eased home purchase restrictions initially imposed to curb housing speculation.

In response to the policy upgrades, the stock market, which had long been on a downward trend, has shown solid recovery since late September.

The robust domestic consumption during the National Day holiday from October 1 to 7 is another indicator of China's economic vitality. The country recorded 765 million domestic tourist trips, a 10.2-percent increase compared to the same period in 2019, according to the Ministry of Culture and Tourism. Total spending exceeded 700 billion yuan ($99 billion), a 7.9-percent rise over pre-COVID levels in 2019. 

China targets an economic growth of around 5 percent in 2024. According to the National Bureau of Statistics, the country's GDP grew 5.3 percent year on year in the first quarter and 4.7 percent in the second quarter. With positive signs emerging, the growth target appears achievable. But the government's commitment to economic stability extends well beyond.

On October 8, the National Development and Reform Commission (NDRC), China's top economic planner, weighed in. Among other initiatives, it revealed plans to release investment projects worth 200 billion yuan ($28 billion) from next year's budget in advance. A priority will be the renovation of gas, water, sewage and heating pipelines in urban areas, which is expected to drive an estimated 4 trillion yuan ($566 billion) in investment demand over the next five years.

More pro-growth policies are in the pipeline, the NDRC said. As they are implemented, they will be continuously evaluated and refined. It is likely that the latest initiatives will foster a more conducive environment for steady growth and structural improvements.