The Political Bureau of the Central Committee of the Communist Party of China held a meeting on December 9th to analyze and study the economic work in 2025. As a scheduled meeting before the Central Economic Work Conference, this Politburo meeting has seen significant changes in multiple policy statements that exceed market expectations, which has attracted widespread attention. After a 14 year hiatus, the meeting on "moderately loose" monetary policy fully affirmed the hard won development achievements of 2024, stating that "the main goals and tasks of economic and social development for the whole year will be successfully completed"; At the same time, a policy tone of "more proactive and proactive" has been proposed for the internal and external challenges that the national economy may face in 2025. In terms of monetary policy, the policy orientation has shifted from "steady" for fourteen years to "moderately loose". Looking back at history, China has adopted a "moderately tight" monetary policy since 1993; In 1998, in response to the Asian financial crisis and insufficient domestic demand, monetary policy shifted to a "prudent" approach; In 2008, in order to prevent economic overheating and curb inflation, monetary policy was changed to "tightening"; From 2009 to 2010, in response to the global financial crisis, monetary policy became moderately loose; In 2011, it returned to 'steady' and continued until 2024. From this, it can be seen that 'moderately loose' is the most loose expression in the monetary policy tone of previous years. Analysts generally believe that the central bank will take greater measures to cut interest rates and reserve requirement ratios in 2025. Zhang Jun, Chief Economist of Galaxy Securities, stated that the policy interest rate may be reduced by a cumulative 40-60 basis points throughout next year, guiding the 5-year LPR to decline by 60-100 basis points; The reserve requirement ratio may be reduced by 150-250 basis points throughout the year. In terms of fiscal policy, the meeting proposed to implement a "more proactive" fiscal policy. Compared to the proposal put forward at the Politburo meeting in December last year that "active fiscal policies should be moderately strengthened, improved in quality and efficiency", "more proactive" indicates that the implementation of fiscal policies in 2025 will be significantly increased compared to 2024. Luo Zhiheng, chief economist of Yuekai Securities and president of the research institute, said that the fiscal policy in 2025 will be further strengthened, which may be reflected in the increase of deficit and special debt scale, and the continued issuance of ultra long term treasury bond. "One is that the scale may exceed expectations, and the other is that the pace may be faster." Many analysts predict that the deficit ratio is expected to rise to about 4.0% in 2025, and the scale of ultra long term special treasury bond and local government special debt is expected to further increase. The Politburo meeting may use "unconventional" policy tools to propose "unconventional" countercyclical adjustments, which is relatively rare in major conferences over the years and fully reflects the central government's determination to promote sustained economic recovery and boost market confidence and expectations. Zhang Yu, Deputy Director and Chief Macro Analyst of Huachuang Securities Research Institute, stated that breakthrough terms such as "unconventional" are rarely used in Politburo meetings, and only similar statements have been made about the poverty alleviation campaign in history, indicating the determination of the central government. The use of "unconventional" measures for countercyclical regulation this time means that many policies in the future can have room for breakthroughs, innovations, and boldness. According to Luo Zhiheng's analysis, "unconventional countercyclical adjustment" emphasizes foresight and staying ahead of expectations, which is conducive to stabilizing expectations, stabilizing total demand, and consolidating the foundation for economic recovery and improvement. The 'unconventional' countercyclical adjustment may be reflected in more proactive policy ideas, richer tools, greater operational intensity, more targeted, and more comprehensive aspects Lian Ping, president and chief economist of Guangkai Chief Industrial Research Institute and chairman of the China Chief Economist Forum, said that, for example, using "unconventional" policy tools and learning from foreign experience to further enrich and improve the policy toolbox, the central bank may use policy tools such as large-scale purchase of treasury bond, establishment of a specific purpose company or fund to directly purchase real estate related assets, and establishment of a stabilization fund to support the development of the stock market. The statement of "stabilizing the real estate and stock markets" in the conference bulletin was first proposed, which is the first time in years that it has appeared in a Politburo meeting. The capital market, as an expected 'expectation', has the most leading and flexible pricing, and stabilizing the stock market is the first step to stabilizing all expectations; The real estate market, as the largest stock asset of the Chinese residential sector, can only be stabilized when the real estate market is stable. Changes in stock are the basis for changes in flow and the first step in activating domestic demand Zhang Yu analyzed that "stabilizing the stock market and real estate market is the key to stabilizing the overall economy and expectations." Wang Qing, Chief Macro Analyst of Dongfang Jincheng, said that the demand for stabilizing the real estate market at this meeting is consistent with the "promoting the real estate market to stop falling and stabilize" proposed at the September Politburo meeting. He predicts that by 2025, there will be further room to increase real estate support policies on both the supply and demand sides, represented by lowering residential mortgage interest rates, increasing credit supply to real estate companies, accelerating the implementation of monetized resettlement methods for urban village renovation, and purchasing affordable housing with special bond funds. The key is to lower the actual residential mortgage interest rates that are still high after taking into account price factors. Chen Wenjing, Director of Policy Research at Zhongzhi Research Institute, believes that more stable real estate policies are expected to accelerate their implementation in 2025. From the perspective of real estate policy direction, on the one hand, the policies that have been introduced earlier are expected to accelerate their implementation, which will have a positive effect on improving market supply and demand relations and promoting market confidence recovery; on the other hand, there are also follow-up expectations for more incremental policies. As usual, the Central Economic Work Conference will be held about a week after the Politburo meeting in December each year. More specific policy details regarding economic work in 2025 will be deployed at the upcoming Central Economic Work Conference. (New Society)