Highly-Anticipated Meeting Sets Tone for China's Economic Work in 2024

Economic

Summary:

Following a key meeting setting the country's economic policy priorities for 2024, China is poised for steady economic growth and high-quality development.

The annual Central Economic Work Conference was held in Beijing from Monday to Tuesday, reviewing China's economic work in 2023, analyzing the country's current economic situation and arranging economic work for next year.

Despite external pressure and internal difficulties, China's economy has achieved a recovery and made solid progress in high-quality development in 2023, the meeting said.

Although the country continues to face challenges such as a lack of effective demand, overcapacity in certain sectors, and lackluster social expectations, overall, favorable conditions outweigh unfavorable factors, and the fundamental trend of the country's economic recovery and long-term positive outlook has not changed, it said.

The meeting has clearly signaled how policymakers will seek to appropriately expand and effectively upgrade China's economy in the next year.

Consolidating Foundation for Growth

The meeting called for efforts next year to pursue progress while ensuring stability, consolidate stability through progress, and establish the new before abolishing the old.

Consolidating stability through progress requires a more appropriate target and greater synergy in multiple policies, said Wen Bin, chief economist at China Minsheng Bank, adding that an approximate annual goal of 5 percent growth and more proactive policies to perk up the confidence of business entities are expected.

Establishing the new before abolishing the old means ensuring a smooth transformation from old patterns to new patterns in key spheres, including the country's energy structure, economic driving forces and real-estate sector development model, he said.

The meeting called for efforts to strengthen counter-cyclical and cross-cyclical adjustments of macro policies, and for efforts to continue implementing a proactive fiscal policy and prudent monetary policy with strengthened innovation and coordination of policy tools.

A proactive fiscal policy means that China will moderately increase the scale of its fiscal expenditure and improve the efficiency of its capital use, said Feng Xuming, a researcher at the Chinese Academy of Social Sciences.

China is expected to reduce comprehensive financing costs and leverage various monetary policy tools to support the real economy in a precise and effective manner, said Zeng Gang, director of the Shanghai Institution for Finance and Development.

The meeting also noted that measures should be taken to strengthen the consistency of macroeconomic policy orientation and coordination on fiscal, monetary, employment, industrial, regional, sci-tech and environmental policies, and include non-economic policies in the assessment of macroeconomic policy consistency to ensure that the policies create synergy.

Strengthening policy coordination can help avoid contradictions between different policies, and create synergy to promote high-quality development, Feng said.

Development-Oriented Tasks

The meeting outlined nine priorities in the primary task of achieving high-quality development, with positioning sci-tech innovation to lead the development of a modern industrial system at the top of the list.

This is the first time in recent years that the Central Economic Work Conference has put sci-tech innovation at the top of the economic agenda for the next year, noted Tian Xuan, vice president of the Tsinghua University PBC School of Finance.

Tian called the arrangement a "precise, strategic judgement," based on a comprehensive evaluation of China's economic development progress and development focus.

"China is at a critical juncture of pivoting to new growth drivers from its traditional ones," Tian said. Achieving this growth driver switch, backed by a transition in the country's economic structure and greater high-tech self-reliance, has become an urgent reform task, Tian added.

The meeting said that the development of the private economy should be advanced, which has also been noticed by analysts.

Wei Qijia, a research fellow at the Department of Economic Forecasting of the State Information Center, said that the meeting has signaled that solid measures will be fleshed out to encourage, support and guide the development of the private economy. "It will create positive and stable expectations for the development of the private economy," Wei said.

In reference to the meeting's discussion of expanding high-standard opening-up, Wen Bin was of the view that the country will place more equal importance on the development of foreign trade and foreign investment than it has before.

This would demonstrate that China will consistently adhere to high-standard opening-up and work to promote reform and development through opening-up, no matter how the external situation changes, Wen said.

Source: Xinhua

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