Key takeaways from China’s annual Central Economic Work Conference

The annual Central Economic Work Conference in which China decided the priorities for economic work in 2024 was held in Beijing on Monday and Tuesday.

Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, Chinese president and chairman of the Central Military Commission, delivered an important speech at the conference.

It was noted at the meeting that China’s economy has achieved a recovery, with solid progress made in high-quality development in 2023, but there are still some difficulties and challenges that need to be overcome to further revive the economy.

Here are some of the key takeaways from the meeting.

Trend of economic recovery, long-term positive outlook not changed

Important progress has been made in the construction of a modern industrial system, and new breakthroughs have been achieved in scientific and technological innovation, the meeting said, adding that reform and opening-up have been advanced in depth, and people’s livelihoods have been effectively guaranteed.

Consumption is playing an increasingly important role in driving growth in China, with consumer spending contributing 83.2 percent to economic growth in the first three quarters, data from the National Bureau of Statistics (NBS) showed. Meanwhile, the country’s express delivery sector has handled a record of 120 billion parcels so far this year, suggesting continuously recovering consumer demand.

The tech-intensive green trio of solar batteries, lithium-ion batteries and electric vehicles have replaced apparel, home appliances and furniture to become the top drivers of China’s foreign trade. The total export value of these products jumped 41.7 percent year on year in the first three quarters of this year.

To further revive the economy, China still has to overcome some difficulties and challenges, including a lack of effective demand, overcapacity in some sectors, lackluster social expectations, certain risks and hidden problems, the meeting said.

It is important to be more mindful of potential dangers and to effectively respond to and solve these problems, said the meeting.

Overall, favorable conditions outweigh unfavorable factors in China’s development, and the fundamental trend of the economic recovery and long-term positive outlook has not changed, the meeting said, urging stronger confidence.

Improving policies for stability, growth and employment

Regarding next year’s economic work, the meeting called for efforts to pursue progress while ensuring stability, consolidate stability through progress, and establish the new before abolishing the old.

It urged the introduction of more policies that will help stabilize expectations, growth and employment, as well as active endeavors to promote the transition of growth models, structural adjustment, and quality and efficiency improvement, so as to consolidate the foundation of stable economic development with positive outlook.

The country should strengthen counter-cyclical and cross-cyclical adjustments in macro policies and continue to implement a proactive fiscal policy and a prudent monetary policy with strengthened innovation and coordination of policy tools, the meeting said.

Proactive fiscal policies should be enhanced with improving efficiency, it said, urging efforts to make good use of fiscal policies to improve financial efficiency and policy effects, implement structural tax and fee reduction policies, and enhance fiscal sustainability.

Stressing that a prudent monetary policy should be flexible, appropriate, precise and effective, it called for guiding financial institutions to step up support for technological innovation, green transformation and other fields, and maintaining the stability of the renminbi (RMB) exchange rate at a reasonable and balanced level.

Pan Gongsheng, governor of the People’s Bank of China (PBOC), said the central bank will keep interest rates at an appropriate level and ensure that the financing costs of the real economy are lowered steadily.

The PBOC will also increase support for major national strategies, key areas and weak links, and make full use of structural monetary policy tools to beef up support for small and micro businesses, as well as scientific and technological innovation, Pan said.

Advancing technological innovation, expanding domestic demand

In order to continue promoting high-quality development, the meeting urged efforts to construct a modern industrial system with scientific and technological innovation.

Efforts must be made to vigorously promote new industrialization, develop the digital economy, and speed up the development of artificial intelligence, it said, urging the need to strengthen applied basic research and cutting-edge research, and the dominant position of enterprises in scientific and technological innovation.

In addition, it is necessary to expand domestic demand and spur consumption with potential. The meeting said consumption needs to be promoted from post-pandemic recovery to continued expansion.

It called for efforts to cultivate and expand new consumption, develop digital consumption, green consumption and healthy consumption, as well as actively cultivate new consumption growth points in areas such as smart homes, entertainment, tourism, sports events, and trendy Chinese products.

“Focusing on high-quality development, we need to open up the stuck points and blockages that restrict the economic cycle, and strengthen self-reliance in high-level science and technology,” Zheng Shanjie, head of the National Development and Reform Commission, told China Media Group (CMG).

Expanding high-level opening-up, resolving risks in key areas

It is necessary to accelerate the cultivation of new momentum for foreign trade, consolidate the basic structure of foreign trade and foreign investment, and expand trade in intermediate goods and services, as well as cross-border e-commerce exports, the meeting said.

Calling for continuing to build a market-oriented, legal and international business environment, it stressed the need to effectively remove the obstacles for foreigners to come to China for business, study, and tourism, and do a good job in implementing the eight steps to support high-quality Belt and Road cooperation.

Regarding the real estate sector, China will speed up the construction of a new model of development, and coordinate the resolution of local debt risks and stable development.

Efforts must be made to actively and steadily resolve real estate risks, and meet the reasonable financing needs of different real estate enterprises, aiming to promote the stable and healthy development of the real estate market, said the meeting. (CGTN)

(With input from Xinhua)