China’s annual Central Economic Work Conference, held in Beijing from Wednesday to Thursday, set the tone for the nation’s economic agenda in 2025. The conference emphasized the need for a more proactive fiscal policy and a moderately accommodative monetary policy, along with expanding domestic demand on all fronts.
Embracing a More Proactive Fiscal Policy
The adoption of a more proactive fiscal policy signals stronger governmental support for economic growth in the coming year. “To be more proactive means to fully leverage China’s fiscal policy space,” said Yang Zhiyong, head of the Chinese Academy of Fiscal Sciences. He noted that increasing the deficit-to-GDP ratio could bolster funds to stimulate consumption and investment, thereby expanding domestic demand.
Experts highlighted that this approach demonstrates the continuity and stability of China’s fiscal policy. “Issuing and implementing a package of fiscal policies in advance is expected to help expand aggregate demand,” said Luo Zhiheng, chief economist at Yuekai Securities. Yang added that effectively utilizing fiscal tools would promote the achievement of policy goals, such as securing people’s basic livelihoods and supporting local governments.
Implementing a Moderately Accommodative Monetary Policy
The conference also called for a moderately accommodative monetary policy, aiming to ensure ample liquidity in the financial system. Measures such as reducing the reserve requirement ratio and interest rates at appropriate times are intended to support economic activity. Coordinated efforts between fiscal and monetary policies are expected to enhance their overall effectiveness.
Expanding Domestic Demand on All Fronts
Expanding domestic demand is a key focus for 2025. By stimulating consumption and investment, China aims to create a robust internal market that can drive sustainable growth. The coordination between various policies—including employment, industrial, regional, trade, environmental, and regulatory policies—alongside continued reform and opening-up measures, is expected to support this goal.
Looking Ahead
As China navigates the complexities of the global economic landscape, the strategies outlined at the Central Economic Work Conference underscore a commitment to proactive and coordinated policy measures. By fostering internal demand and ensuring policy support, China is positioning itself for stable economic development in 2025 and beyond.
Reference(s):
cgtn.com
