September 26, 2024—The Political Bureau of the Central Committee of the Communist Party of China convened a crucial meeting to analyze the nation’s current economic landscape and plan strategic steps forward. Amid mounting economic pressure, the government is enacting robust fiscal and monetary policies to stabilize growth and ensure the achievement of annual socio-economic targets.
Since the beginning of the year, China’s economy has remained stable while striving for progress. However, from January to August 2024, it has faced significant challenges due to a complex domestic and international environment. Factors such as extreme weather events, insufficient effective domestic demand, and a high base effect from the previous year have intensified downward pressure on the economy.
Recognizing these hurdles, the meeting emphasized the need for comprehensive, objective, and calm assessment of the economic situation. The government reaffirmed its commitment to addressing difficulties head-on, maintaining confidence, and enhancing the sense of responsibility and urgency in economic work.
To counter the slowdown and fortify the foundation for economic recovery, the meeting decided to increase the strength of counter-cyclical adjustments in fiscal and monetary policies. The People’s Bank of China announced a reduction in the reserve requirement ratio for financial institutions by 0.5 percentage points, effective September 27, 2024. This move aims to release additional liquidity, reduce financing costs for the real economy, and inject vitality into the market.
On the fiscal front, the government plans to issue ultra-long special treasury bonds and special-purpose bonds for local governments. These measures are intended to enhance the role of government investment, ensure necessary fiscal expenditures—particularly focusing on the “three guarantees” at the grassroots level—and stabilize market expectations.
Addressing the real estate sector, the meeting proposed promoting the stabilization and recovery of the real estate market. Measures include strict control over the increment of commercial housing construction, optimizing existing stock, and improving quality. These steps aim to alleviate market pressures, boost confidence, and promote steady and healthy development in the real estate market.
The targets set in the government’s work report at the beginning of the year, such as achieving around 5 percent GDP growth and maintaining the urban surveyed unemployment rate at approximately 5.5 percent, remain steadfast commitments. Despite the challenges, the government expressed confidence in China’s ability to meet these goals through decisive policy actions and strategic planning.
The meeting concluded with a call for heightened responsibility and urgency in executing economic work, ensuring that the nation navigates through the current challenges toward sustained growth and stability.
