Caixin G20 Round Table: Larger Stimulus Package Would Do More to Stabilize China’s Growth

Speakers at event on sidelines of Rio de Janeiro G20 summit call for China to implement a stimulus of a magnitude similar to that unleashed during the global financial crisis

On Monday, the Caixin Roundtable G20 Special Session — “Brazil-China Cooperation for a Shared Future” — took place in Rio de Janeiro. Photo: Caixin

While Beijing’s recent fiscal stimulus measures are encouraging, even greater support is needed to stabilize economic growth, Chinese financial experts said on the sidelines of the G20 summit in Rio de Janeiro this week.

“I think the size of the stimulus, as much as 10 trillion yuan ($1.4 trillion) sounds amazing, [but] it is not sufficient to stabilize the housing sector or overall economic growth,” Zhu Ning, finance professor at the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University, said at a Caixin roundtable in the Brazilian city on Monday.

Giving the example of the 4-trillion-yuan stimulus program that the Chinese government rolled out after the 2008 global financial crisis, which accounted for more than 10% of the country’s GDP at the time, Zhu stated that a similar 15-trillion-yuan package is now needed to “effectively or powerfully turn the economy around.” China’s GDP was 126 trillion yuan in 2023.

Gene Ma, the head of China research at the Institute of International Finance, also called for a stimulus package of a magnitude similar to that unleashed in the late 2000s, describing the latest fiscal policies as being aimed at risk mitigation rather than “outright stimulus spending.”

A “massive” stimulus package could also help alleviate China’s deflationary pressure and expand China’s imports, Ma added, which would especially be advantageous as trade tensions between Beijing and Washington rise following the re-election of Donald Trump.

Despite the difficulties facing the Chinese economy, several speakers said they believe China will meet its “around 5%” GDP growth target for the year, including Zhu as well as Song Shanshan, a macroeconomy and market strategy analyst at Taikang Funds Management Co. Ltd.

During the panel, held in collaboration with the Brazilian Center for International Relations (CEBRI), Marcos Caramuru de Paiva, former Brazilian ambassador to China and current CEBRI board member, expressed concern over the fate of Brazilian farmers if China agrees to restart trade negotiations with the new Trump administration.

Brazil may end up losing some of its share of Chinese soybean imports to the U.S., he said.

After the U.S.-China trade war began in 2018, Brazil replaced a portion of U.S. soybean exports to China, with some Brazilian farmers dedicating their land to soybean cultivation to satisfy the Chinese market. In recent years, over 20% of all Chinese agricultural imports came from Brazil, according to a CEBRI report in 2022. Depending on the month, as much as 90% of China’s soybean imports come from Brazil, Caramuru de Paiva said.

However, with rising uncertainty and the anti-globalization tendencies of the incoming Trump administration, Brazil and many other countries hope to increase dialogue and “be closer to China,” he added. “At the end of the day, the international order needs an anchor, a few anchors. And China will be a very safe anchor,” the former ambassador said.

Larissa Wachholz, a senior fellow for Asia Program at CEBRI, suggests Brazil focus on green energy in its cooperation with China, as Brazil is set to host the 30th United Nations Climate Change Conference in 2025.

Looking ahead, Trump’s return may rekindle the right-wing populism in Brazil, which will hold presidential elections in October 2026, said Claudia Trevisan, a journalist and executive director of the Brazil-China Entrepreneurship Council, warning that a right-wing leader could hinder Brazil-China cooperation.