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Maintaining Firm Confidence in Economic Work

By Qiushi Commentary Source: English Edition of Qiushi Journal Updated: 2023-05-05

Since the 18th National Congress of the Communist Party of China (CPC) in 2012, General Secretary Xi Jinping has stressed that the trend of steady and long-term economic growth has not changed for China and that we should have firm confidence in carrying out economic work. In his address on New Year’s Eve 2023, he reiterated this point: “The Chinese economy enjoys strong resilience, tremendous potential, and great vitality. The fundamentals sustaining its long-term growth have remained strong. As long as we stay confident and strive for progress while maintaining stability, we will realize the goals we have set.”

There are indeed reasons to be confident when carrying out economic work.

China has strategic conditions and development strengths working in its favor.

Among these are the following: first, the strong leadership of the CPC; second, the notable institutional strengths of socialism with Chinese characteristics; third, the solid foundation laid by China’s sustained and rapid development; fourth, long-term social stability; and fifth, our spirit of self-confidence and self-reliance. We also enjoy structural strengths thanks to our socialist market economy, strengths in terms of demand on account of China’s enormous domestic market and in terms of supply due to a well-functioning industrial system, as well as human resource strengths, which are rooted in China’s vast numbers of workers and entrepreneurs who are both hardworking and intelligent. Once we truly tap into these advantages and vitality, we will be able to create a new development dynamic at a much faster pace and place ourselves in an unassailable position in the face of intense international market competition and strategic scheming by major countries.

China has reached a higher historical starting point in development thanks to achievements and changes in the last 10 years, including a shift to high-quality development.

In the first decade of the new era which began in 2012, China eliminated absolute poverty and built a moderately prosperous society in all respects, as scheduled. It attained a medium-high growth rate of 6.6% per year, placing it in the ranks of the world’s leading major economies, and its average contribution to global economic growth exceeded 30%. Its GDP rose from 53.9 trillion yuan in 2012 to 114.9 trillion yuan in 2021. China’s ranking on the World Intellectual Property Organization’s Global Innovation Index rose from 34th in 2012 to 11th in 2022. For eight years in a row, total national grain output has exceeded 650 million metric tons; and China’s manufacturing sector remains the largest in the world. Our country’s economic power, scientific and technological capabilities, composite national strength, and international influence have all made a noticeable jump, and this has helped lay a more solid foundation for our development.

The CPC has continued to deepen its understanding of the laws underlying economic work and gained a more sophisticated ability to grasp and apply these laws. 

Through a process of practice, understanding, and then further practice and further understanding, continuous progress can be made in exploring, grasping, and applying economic laws—this is the fundamental experience that has been gained in carrying out economic work. Since its 18th National Congress, the CPC has reviewed economic work on an ongoing basis. As a result, it has gained an understanding of a whole series of laws underlying successful economic work. These include upholding the centralized, unified leadership of the Party Central Committee, promoting high-quality development, pursuing progress while maintaining stability, and strengthening overall coordination. To do economic work well, it is essential to follow the Party’s overall leadership, particularly the leadership of the Central Committee, take development as the Party’s top priority in governing and rejuvenating the country, uphold and improve the basic socialist economic system, promote high-standard opening up, and ensure that the economy develops under the rule of law. In grasping such laws, the Party has provided important guidelines for managing China’s overall economic development.

Xi Jinping’s economic thought has provided sound theoretical guidance for economic work in the new era.

The guidance of Marxist theory is what enables us to seize the historical initiative. Since 2012, the CPC Central Committee with Xi Jinping at its core has put forward new ideas, new thinking, and new strategies in the course of leading China’s economic development in the new era, thus giving rise to Xi Jinping’s economic thought. This thought has provided systematic answers to the fundamental questions of how to view the economic situation and how to carry out economic work. It reflects the CPC’s profound insights on the laws governing economic development, especially the development of a socialist economy. It constitutes an incisive theoretical tool for guiding efforts to promote high-quality economic development, respond to major risks and challenges, and build a modern socialist country. Guided by Xi Jinping’s economic thought, China has made major achievements in economic development and steered its economy onto a path of higher quality, more efficient, fairer, and more sustainable and secure development.

In the first decade of the new era, our country has overcome a variety of difficulties and obstacles in economic development. It has broken the waves and steadily forged ahead to accomplish rapid economic growth. As we embark on a new journey to build a modern socialist country, we are sure to achieve similar feats in promoting high-quality development.

In economic work this year, it is key that we follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, make solid strides in advancing Chinese modernization, and act on the general principle of pursuing progress while maintaining stability. We must fully and faithfully apply the new development philosophy across the board, accelerate the creation of a new development dynamic, strive to promote high-quality development, and coordinate Covid-19 response and economic and social development. We must better ensure both development and security, comprehensively deepen reform and opening up, and significantly bolster market confidence. We should see that implementation of the strategy to expand domestic demand is integrated with efforts to deepen supply-side structural reform, prioritize the tasks of ensuring stable growth, stable employment, and stable prices, and effectively guard against and defuse serious risks. We need to promote a full economic recovery and effectively pursue higher-quality growth while appropriately increasing economic output. These efforts will set the stage for building a modern socialist country.

It is important to give top priority to stability and pursue progress while maintaining stability. The proactive fiscal policy and prudent monetary policy should be continued. The intensity of macro-policy regulation should be increased, and policy coordination should be enhanced to generate synergy for high-quality development. The proactive fiscal policy should be strengthened in terms of both intensity and effectiveness, with the prudent monetary policy applied in a more targeted way. Industrial policies should give consideration to both development and security imperatives, and science and technology policies should be aimed at building up our country’s strength and self-reliance. Social policies should be geared toward ensuring people’s basic needs.

It is important to apply systems thinking and to uphold fundamental principles while breaking new ground. Taking well-coordinated steps, we should carry out Covid-19 response and promote economic and social development, effectively pursue higher-quality growth and appropriately increase economic output, carry out supply-side structural reform and expand domestic demand, implement economic policies in conjunction with policies in other spheres, promote both domestic and international economic flows, and pay attention to both current and long-term priorities. With a focus on maintaining stable growth, employment, and prices, efforts should be made to ensure that the economy remains within an appropriate range. We should take firm steps to deepen reform and further unleash market vitality and social creativity. We should develop the real economy and rely on innovation to foster new growth drivers. Energy should be devoted to harnessing the potential of the domestic market and ensuring domestic demand plays a stronger role in driving growth. Greater efforts should be made to keep the volume of foreign trade stable and to improve its structure, while further steps should be taken to stabilize and expand foreign investment. Basic public services should also be enhanced to meet people’s basic living needs and continue improving people’s wellbeing.

In economic work this year, the overall strategic context must be kept in mind, and the first task should be to boost social expectations and development confidence, as this will pave the way for overall success.

Expanding domestic demand

Large countries enjoy the advantage of being able to form a large domestic market. By expanding domestic demand, we will lay an important foundation for ensuring unimpeded economic flows and promoting a full economic recovery. We will also open up an effective avenue for high-quality development. We should give full play to the fundamental role of consumption and the key role of investment by prioritizing consumption recovery and expansion and ensuring government investment and policy incentives encourage and drive investment society-wide.

Building a modern industrial system

This is a long-term task in building a modern socialist country as well as an immediate economic priority. China has the most complete industrial system in the world and accounts for about 30% of global manufacturing output. For the past 13 years, it has been the world’s leading manufacturer. In promoting economic recovery and development, the emphasis should be on accelerating the development of a modern industrial system, with priority on improving industry quality, shoring up supply-chain weaknesses, seizing new opportunities, and refining structures and frameworks.

Working unswervingly to consolidate and develop the public sector and to encourage, support, and guide development of the non-public sector

The public and private sectors are each important components of the socialist market economy. Unswerving efforts should be made to develop both. From an institutional and legal perspective, we must ensure equal treatment for state-owned and private enterprises. Doing so will help reinforce the resilience of China’s economy, tap greater potential for economic growth, make development more dynamic, and deliver high-quality economic development. The reform of state-owned assets and state-owned enterprises (SOEs) should be carried to a deeper level and SOEs should improve their modern corporate governance with distinctive Chinese characteristics. The private sector and private enterprises should be encouraged in going from strength to strength, and the property rights of private enterprises and the rights and interests of entrepreneurs should be protected in accordance with the law.

Intensifying efforts to attract and utilize foreign investment

China is committed to a fundamental policy of opening up. Foreign investment serves as an important link between domestic and international markets and resources. As such, more intensive efforts to attract and utilize foreign investment will help facilitate positive interplay between domestic and international economic flows. To make fresh headway in high-standard opening up, China should further ease market access, ensure national treatment for foreign-invested enterprises, put into full effect the new catalog of encouraged industries for foreign investment, and protect the rights and interests of foreign enterprises in accordance with the law. This will make us well-placed to attract more global resources and factors of production to the domestic market.

Effectively preventing and defusing major economic and financial risks

Security is a prerequisite for development. Preventing and defusing major economic and financial risks is important for both promoting virtuous financial and economic cycles and keeping the economy on an even keel. We should tackle the symptoms and root causes of problems and combine long-term and short-term considerations. Steps should be taken to ensure stable development in the real estate market, reinforce buffers for food, energy, and industrial and supply chain security, and effectively guard against and defuse financial and local-debt risks, thus ensuring no systemic risks arise.

(Originally appeared in Qiushi Journal, Chinese edition, No. 2, 2023)