China’s stimulus measures are just trickling through the economy

China’s latest efforts to kickstart growth haven’t had a broad impact yet, data and company earnings show, indicating the world’s second-largest economy won’t be roaring back soon.

Growth in pockets from real estate to manufacturing has improved since Beijing began announcing stimulus measures in late September. Companies, however, have maintained a cautious tone when sharing outlooks in the last few weeks.

When asked on an earnings call Friday about the impact of stimulus, food delivery giant Meituan only said that in October, the average hotel order value in its newer travel booking business fell less than in the prior months, on an year-on-year basis.

“While it will take some time for the positive effect to fully materialize and to further [expand] to more consumption categories, we are confident that these policies will gradually provide more support for the real economy and incentivize consumer spending, bringing more growth opportunities for our business,” said Shaohui Chen, Meituan CFO and senior vice president, according to a recording of the earnings call.

Executives from e-commerce company Alibaba and social media operator Tencent shared similar comments last month in their earnings calls, saying stimulus would take time to translate into growth.

The ramp-up in stimulus measures is aimed at reaching this year’s official target of around 5%, and a similar pace next year — while preventing financial instability, Gabriel Wildau, managing director at Teneo, said in a note Monday. To him, the tone on the economy indicates that “technological self-sufficiency and national security remain the top priorities” for China.

“Looking ahead, our sources expect that stimulus in 2025 will trickle out incrementally and in a data-dependent fashion,” Wildau said. “‘Just enough’ rather than ‘whatever it takes’ will be the guiding principle.”

Preliminary economic indicators for November reinforce a picture of improving, but not explosive, growth.

The Caixin purchasing managers’ index for manufacturing showed further expansion in factory activity with a print of 51.5, its highest reading since June, according to LSEG data. The official PMI came in at 50.3, the highest since April. Retail sales and industrial data for November are due Dec. 16.

Caixin’s measure of manufacturing labor showed employment contracted for a third straight month in November. That indicates “the effect of economic stimulus is yet to be felt in the labor market and businesses’ confidence in expanding workforce needs to be strengthened,” Wang Zhe, senior economist at Caixin Insight Group, said in a report.

“While the economic downturn appears to be bottoming out, it needs further consolidation,” Wang said, noting the rising risk of “external uncertainties.”

The U.S. on Monday issued yet another round of restrictions aimed at crimping Chinese chipmakers. President-elect Donald Trump last week announced plans to impose 10% tariffs on all U.S. imports of Chinese goods once he takes office in January.

“Markets will only be salivating for more and more stimulus as the geopolitical temperature rises,” according to U.S.-based advisory firm China Beige Book’s survey of Chinese businesses released Monday.

The firm surveyed 1,502 companies from Nov. 14 to Nov. 26, and found that retail spending improved from a year ago, along with home sales, despite “widespread” weakness in consumption of services. The report also noted that the share of the respondents borrowing more rose to the highest since May 2022, indicating a pickup in demand.

“Beijing’s stimulus measures encouraged firms to come off the sidelines this month,” the report said. “But it’s unlikely to last without pledges of additional support.”

China’s Ministry of Finance has said more fiscal support could come next year. Investors are also watching for details from China’s annual economic planning meeting, typically held in mid-December.