China’s 2024 government work report highlights a strategic emphasis on maintaining economic stability while fostering progress and innovation. The report outlines a prudent monetary policy that is “flexible, appropriate, precise, and effective,” aiming to adapt to macroeconomic shifts without resorting to a simplistic easing or tightening approach.
The overarching theme is to balance aggregate financial control with structural adjustments. The government plans to “maintain adequate liquidity at a proper level” and ensure that “aggregate financing and money supply stay in step with the projected economic growth and CPI increase.” This approach underscores a commitment to overall stability, even as specific policies may fluctuate during different stages.
Notably, the report emphasizes the importance of high-quality development, focusing on efficiently utilizing existing resources and preventing idle funds within the financial system. The goal is to direct incremental investment toward creating substantive value, supporting key areas such as fintech, green finance, inclusive finance, pension finance, and digital finance. These sectors represent strategic directions for financial support to enhance the real economy’s development.
Small and medium-sized enterprises (SMEs) receive particular attention, with the government urging relevant institutions to optimize measures like financing credit enhancement, risk sharing, and information sharing. Addressing financing challenges for SMEs is seen as crucial for solving economic development and employment issues. The report acknowledges that overcoming these challenges requires collaborative efforts across financial institutions, regulatory policies, fiscal resources, and other governmental departments.
The government also signals a new round of fiscal and tax reforms, aiming to “increase fiscal, tax, and financial support to promote high-quality development.” This includes plans for the reform of the financial system, following the establishment of the National Financial Regulatory Administration (NFRA) and adjustments in the roles of key financial regulatory bodies.
Enhancing the financial regulatory system is highlighted as essential for “raising our capacity for preventing and controlling financial risks.” With the increasing role of finance in economic development and the impact of globalization, improving regulatory mechanisms is vital for promoting economic progress while mitigating potential risks.
Overall, China’s 2024 financial priorities reflect a strategic balance between maintaining stability, promoting innovation, and preventing risks. By focusing on structural reforms and supporting key sectors, the government aims to foster sustainable economic growth and build a strong financial foundation for the future.
Reference(s):
cgtn.com
