More fiscal and monetary easing likely to support China's growth

More fiscal and monetary easing are likely in China, which is expected to support growth. The subdued inflation, weak trade, RMB new loans and sluggish property starts pointing more easing measures, despite better than expected industrial production.

"On monetary policy, we maintain our forecast of two benchmark rate cuts of 25bp in H1. We also look for 2-3 times 50bp RRR cuts before H1 2016 to support liquidity and lending", says Barclays in a research note. 

Following the tax cut on auto purchases and lower down payment requirement for homes in the month of September, more targeted fiscal stimuli announcements are likely to support consumption and infrastructure investment, along with more reductions to corporate taxes and fees.

"We expect the headline fiscal deficit to expand to 2.7% of GDP in 2016, from the budgeted 2.4% in 2015 and the actual 1.8% in 2014, given weak domestic demand and fiscal efforts to support the structural transition", added Barclays.