Insights from senior officials about China's key economic work conference

BEIJING -- After a key conference of Chinese leaders to decide priorities for next year's economic work, senior officials voiced confidence that the country will accomplish major economic and social development goals this year and promote a sustained economic recovery in 2025.

The annual Central Economic Work Conference was held in Beijing from Wednesday to Thursday.

Zhao Chenxin, deputy head of the National Development and Reform Commission, called 2024 an extraordinary year with encouraging achievements when speaking at a forum on Saturday.

In particular, the economy has seen positive changes since September, with notable improvements in expectations and better performances of major economic indicators, he said at the forum hosted by the China Center for International Economic Exchanges (CCIEE).

Han Wenxiu, executive deputy director of the Office of the Central Committee for Financial and Economic Affairs, predicted that the Chinese economy will expand by around 5 percent this year, contributing nearly 30 percent to global economic growth.

Employment and prices have remained stable, international payments have been basically balanced, and the foreign exchange reserves have remained above 3.2 trillion U.S. dollars, Han said.

Despite these positive indicators, the economy still faces difficulties, and policymakers, in response, outlined a series of measures to tackle challenges at the conference.

Zhao cited a more complicated and grim external environment, insufficient domestic demand, operational difficulties in some enterprises, and pressures on employment and income growth.

"Efforts should be made next year to implement more proactive and impactful macro policies, expand domestic demand, promote the integrated development of scientific and technological innovation and industrial innovation, stabilize the real estate and stock markets, prevent and resolve risks in key areas and external shocks, stabilize expectations, and stimulate vitality," he said.

According to the conference, China will adopt a more proactive fiscal policy and a moderately loose monetary policy in 2025.

Han said there was a shift in policy language this time, which means stronger counter-cyclical adjustments to cope with instability and uncertainty and more robust policy support for achieving annual targets.

To ensure a continuously forceful and more impactful fiscal policy, China will set a higher deficit-to-GDP ratio, strengthen the intensity of fiscal spending, increase the issuance of ultra-long special treasury bonds and local government special bonds, and optimize the structure of fiscal expenditure, said Wang Yiming, vice chairman of the CCIEE.

Wang Xin, head of the Research Bureau of the People's Bank of China, said the country would reduce the reserve requirement ratio (RRR) and interest rates at an appropriate time, with enhanced credit flows to strategic areas, key sectors, and weak links of the economy.

China's average RRR for financial institutions currently stands at 6.6 percent, suggesting further room for reduction, Wang said, noting that these monetary measures will promote stable economic growth, stable employment and reasonable price rebounds.

The conference unveiled key tasks in nine areas for 2025, ranging from expanding domestic demand on all fronts to effectively preventing and defusing risks in key areas.

Vice Commerce Minister Sheng Qiuping said the country will implement special campaigns dedicated to stimulating consumption and carry out more practical measures to unleash consumption potential, including promoting consumer goods trade-ins and fostering new consumption models.

The national trade-in program has driven up consumption by over 1 trillion yuan (about 140 billion U.S. dollars), Sheng said, adding that there will be more measures to promote ice and snow consumption, the debut economy, and sales of new energy vehicles and intelligent home appliances.

As the conference stressed the work to "reverse the downturn of and stabilize the real estate market," Dong Jianguo, vice minister of housing and urban-rural development, said 3.24 million new homes had been delivered as of November under a nationwide government program to help developers deliver homes, which improved market sentiment significantly.

Efforts will be made next year to advance the renovation of shanty towns in cities and dilapidated houses, fully unleash the potential in people's demand for buying their first homes or improving their housing conditions, and reasonably control the supply of newly added real estate land, Dong said.

Dong called for a speed-to-quality transition in the real estate sector, with the construction of safe, comfortable, green and intelligent homes to meet people's demands for high-quality residences and foster a new development model for the real estate sector.