The closely watched Central Economic Work Conference concluded in Beijing on Thursday, where Chinese leaders set forth priorities for the nation’s economic agenda in 2025.
Xi Jinping, general secretary of the Communist Party of China Central Committee, Chinese president, and chairman of the Central Military Commission, delivered an important speech at the annual gathering.
Despite facing a “complex and severe situation of growing external pressures and increasing internal difficulties,” the meeting acknowledged that China has maintained overall economic stability and anticipates achieving the major goals and tasks for economic and social development in 2024.
The conference emphasized the need for China to adopt more proactive macro policies, expand domestic demand, and promote the integrated development of scientific and technological innovation with industrial innovation to propel economic work in 2025.
Efforts will also focus on ensuring steady development in the real estate and stock markets, mitigating risks and external shocks in key areas, stabilizing expectations, and stimulating vitality to promote sustained economic recovery.
More Proactive Fiscal and Monetary Policies
The meeting outlined plans for a “more proactive” fiscal policy, including increasing the deficit ratio and issuing ultra-long special treasury bonds and local government special-purpose bonds.
China’s government debt-to-GDP ratio stood at 67.5 percent at the end of 2023, significantly lower than the average among G20 and G7 countries, indicating room for increased borrowing and deficit expansion, according to Minister of Finance Lan Fo’an.
The conference also signaled a shift in monetary policy, adopting a “moderately loose” stance and indicating readiness to lower the reserve requirement ratio and interest rates when necessary to ensure adequate liquidity. This marks the first transition from “prudent” to “moderately loose” monetary policy since 2011.
Since early 2024, the People’s Bank of China has cut the reserve requirement ratio twice, releasing approximately 2 trillion yuan (about $274.8 billion) in long-term liquidity.
Stimulating Domestic Demand and Opening Up
The conference identified nine priorities for economic work in 2025, including stimulating consumption, developing new quality productive forces, preventing and addressing risks in key areas, consolidating poverty alleviation achievements, and boosting green development.
Emphasizing the need to vigorously boost consumption, the meeting highlighted initiatives to improve investment efficiency and expand domestic demand across all fronts.
China remains one of the world’s largest markets, with total retail sales of consumer goods approaching 40 trillion yuan from January to October this year, according to the National Bureau of Statistics.
A national program promoting consumer goods trade-ins, unveiled in March, has attracted over 30 million participants, contributing total sales of over 400 billion yuan, showcasing the untapped potential of China’s domestic demand.
The meeting also called for intensified efforts to promote high-level opening up and ensure steady growth in foreign trade and investment.
“China’s development is open and inclusive,” President Xi said during a meeting with leaders of major international economic organizations, including the International Monetary Fund, in Beijing on Tuesday.
“China will put in place new systems for a higher-standard open economy, provide more opportunities for the development of other countries, and share more development benefits with the world,” Xi told the leaders at the Great Hall of the People.
Starting December 1, China has granted zero-tariff treatment for 100 percent of tariff lines to all least developed countries with which it has diplomatic relations, helping more products from these countries enter the Chinese market, according to Lyu Daliang from China’s General Administration of Customs.
Reference(s):
China maps out 2025 economic plans, vows more proactive macro policies
cgtn.com
