The “China threat” seems to be slowly fading. Predictions that Beijing would soon overtake the United States as the world's leading power are becoming less common as the economy continues to struggle.    

Yes, China's industrial production reached its highest level in five months in November at 51.1 points (up from 50.3), beating forecasts. However, it is still too early to say that the trend has turned around.     

The country is still struggling to boost consumer spending in the wake of the COVID-19 pandemic, and off-balance sheet debt, along with real estate, continues to weigh on the economy.    

After the 2008 financial crisis, when China allowed local governments to create financing vehicles for infrastructure projects, the debt was not registered on its books.    

According to the Ministry of Finance, local governments had accumulated 14.3 trillion yuan ($1.97 trillion) of hidden debt by 2023. However, economists estimate the total to be between 50 and 60 trillion yuan.    

If this higher estimate is correct, the 4 trillion yuan in special bonds announced for local governments over the next five years may not be enough to cover the hidden debt payment.   

The market also believes that the 10 trillion yuan ($1.4 trillion) announced in November will not be enough, especially with the risk of a second-chapter trade war with the U.S. as Trump wins.   

However, as time went on, Beijing did not announce anything new. As a result, no one is rushing back into the Chinese market, even though valuations remain attractive, unlike most members of the S&P 500.     

Will a miracle happen? It seems the government has few options: either inject money to help the economy or let things run their course, which could lead to even slower growth, if not worse…   

Clearly, the second option is less attractive, so investors are eagerly awaiting next week's Central Economic Conference, where policymakers will decide on monetary and fiscal policy for 2025.    

December will also see a Politburo meeting on the economy, which could provide another opportunity to announce major stimulus measures, a potential surprise.    

Whether expectations will ultimately be met remains a big unknown. Chinese authorities are unlikely to rush in with major stimulus and will probably wait for Trump to take office.    

Beijing's actions will depend on its policy, particularly how tough it gets. In short, we’ll unlikely see additional stimulus measures this year, but the possibility remains high for later.    

Whether this will be enough to boost growth in the Chinese market will also depend on the geopolitical situation, particularly its relationships with the US, EU, and others.