Implementing More Proactive and Impactful Macro Policies for a Sustained Economic Recovery

I. Major achievements in economic work in 2024

The year 2024 marked a crucial year for accomplishing the objectives and tasks set forth in the 14th Five-Year Plan (2021–2025). Despite mounting external pressures and internal difficulties, the CPC Central Committee with Xi Jinping at its core united and led the entire Party and Chinese people in responding with composure to the situation and adopting comprehensive measures. As a result, the economy maintained overall stability while making steady growth, solid headway was secured in promoting high-quality development, and new strides were made in advancing Chinese modernization.

Accomplishing the main projected targets and tasks for economic and social development

In 2024, China’s economy grew by around 5%, accounting for almost 30% of global economic growth. Employment and prices were kept at stable levels. A basic equilibrium was maintained in the balance of payments, with foreign exchange reserves remaining at over US$3.2 trillion. Meanwhile, output and supply grew steadily, the industrial sector registered growth while maintaining stability, and the services sector expanded at a relatively rapid pace.

Steadily advancing the development of new quality productive forces

We saw a constant stream of major scientific and technological advances throughout the year, with important progress in fields such as integrated circuits, artificial intelligence, and quantum technology. Faster strides were made toward modernizing the industrial system, new industries, products, and forms of business all saw vigorous growth, and further headway was made in promoting the intelligent and digital transformation of traditional industries. Our green and low-carbon transition picked up pace, as China became the first country to achieve an annual output of over 10 million alternative energy vehicles.

Deepening reform and opening up

The 20th CPC Central Committee successfully convened its third plenary session, at which it set out plans for furthering comprehensive reform to advance Chinese modernization. Impressive achievements were secured in conducting international engagement in the economic field, with steady progress in advancing high-quality Belt and Road cooperation. The China Railway Express reached the milestone of over 100,000 total trips, while imports and exports between China and other Belt and Road countries grew by 6% in the first 11 months of 2024. Additionally, China saw a notable jump in international business and tourist arrivals.

Defusing risks in key areas in an effective and orderly way

A series of policy measures introduced since October 2024 has driven an effective rebound in confidence in the real estate market, with positive signs that the downturn has been halted and stability is being restored. Nationwide sales of newly constructed commodity housing, measured by floor area, recorded positive annual and monthly growth for two consecutive months. Effective steps have been taken to defuse and control risks related to local government debt and small and medium financial institutions. This ensured that no systemic risks arose.

Ensuring people’s wellbeing with substantive and vigorous steps

Personal incomes rose steadily, and more concrete benefits were extended to the people. China’s achievements in poverty alleviation were also further consolidated and expanded. A new record was set in grain production, with output exceeding 700 million metric tons, reinforcing the underpinning for national food security. Environmental quality also showed sustained improvement throughout the year.

While acknowledging these achievements, we must also be clear about the difficulties and challenges confronting the Chinese economy. These primarily include the following: insufficient domestic demand and weak consumer demand, operational difficulties among some enterprises, pressure on employment and income growth, a relatively high number of risks and hazards in certain fields, intensifying geopolitical conflicts, rising protectionism around the world, and adverse impacts arising from changes in the external environment. However, the Chinese economy has a proven track record of emerging stronger from adversity, and this fact should fill us with strong confidence and assurance as we carry out our economic work in 2025.

II. The strengths and favorable conditions underpinning China’s economy

1. Stable foundations

China’s economy is vast in terms of both scale and market capacity; its industrial support capabilities are strong; and supply and demand are both robust enough to underpin the domestic economy. These are the basic pillars that support steady and sustainable economic growth.

2. Numerous strengths

China possesses multiple strengths that not many other countries can boast. It enjoys the economies of scale and market advantages of a large economy, the qualitative strengths of a strong talent pool, good innovative capabilities, and social stability, and the unique institutional strengths offered by the CPC’s leadership and a socialist market economy. All this provides the basis for China’s strong international competitiveness. China is currently a major trading partner for 150 countries and regions. It is experiencing a growing demand for economic and trade cooperation from developing countries and a number of developed nations, all of which reflect China’s strong international standing.

Vehicles traverse the Huangmao Sea Channel Bridge—a major national construction project—on December 11, 2024, its first day of operation. In 2024, the Chinese economy navigated economic headwinds and challenges and continued making steady progress. As positive momentum was consolidated, further solid strides were made in advancing high-quality development. PHOTO BY XINHUA REPORTER LIU DAWEI

3. Strong resilience

China’s companies possess a bold and enterprising mindset and operational flexibility, while the Chinese people are industrious, ingenious, and tenacious. This gives our country a remarkable ability to adapt to changing circumstances. At the same time, China also has a vast territory, a high household savings rate, and a comprehensive industrial structure, giving our economy a strong capacity to resist risks and withstand shocks.

4. Huge potential

China has a population of 1.4 billion, with more than 400 million people in its middle-income group and over 200 million people with higher education. For 11 consecutive years, China has maintained the largest pool of scientific and research personnel. All this has created a solid foundation for innovation-driven development. Significant room remains for further urbanization. The country’s per capita infrastructure level lags behind that of developed countries, and there is considerable potential to expand domestic demand. By furthering comprehensive reform, we will continue to inject fresh vitality into the market, while the sustained effects of new and existing policies will ensure strong support for economic development.

In short, the fundamental trend of long-term economic growth and the conditions supporting it remain unchanged. Through vigorous reforms and strong policy support, we can fully tap into our development potential and turn all positive factors into concrete development achievements.

III. Implementing more proactive and impactful macro policies

In 2025, we must maintain a steady pace of growth, keep employment and prices generally stable, ensure a basic equilibrium in the balance of payments, and ensure that personal income rises in step with economic growth. To achieve this, we must implement more proactive and impactful macro policies. This means adopting a more proactive fiscal policy and an appropriately accommodative monetary policy, ensuring strong policy support for accomplishing our goals and tasks for the year.

Adopting a more proactive fiscal policy

We should make overall plans for fiscal funds, including revenue and bonds, and effectively use various policy instruments, such as taxation, deficits, and transfer payments, to ensure that fiscal policy has a sustained effect and delivers greater impact. At present, Chinese government debt risks remain broadly manageable, especially as the central government has considerable capacity for additional borrowing. In light of this, we should increase the deficit-to-GDP ratio and expand the deficit, issue further ultra-long-term special treasury bonds and local government special-purpose bonds, and enhance the intensity of fiscal spending to ensure powerful support for economic growth. At the same time, we must ensure a sharper policy focus, with a stronger emphasis on improving people’s lives, promoting consumption, and maintaining economic momentum. The mix of fiscal expenditure should be optimized to ensure support for key areas and enhance the effectiveness of funds. We must make good use of transfer payment policies and funds and step up ongoing monitoring and tiered early warning to ensure that, at the primary level, basic living needs are met, salaries are paid, and governments function smoothly. We should expand the range of eligible investment sectors for local government special-purpose bonds and broaden the scope for using these funds as project capital, ensuring they are better leveraged to shore up weak links and guard against risks.

Implementing an appropriately accommodative monetary policy

Further efforts should be made to leverage monetary policy tools to adjust both the monetary aggregate and structure; we must ensure that aggregate financing and the M2 money supply increase generally in step with the projected targets for nominal economic growth and overall prices. Well-timed reductions should be made to the reserve requirement ratio and interest rates. We should use open market operations and other policy instruments to maintain ample liquidity and boost support for major strategies, key sectors, and weak areas. We must ensure that legitimate funding needs are effectively satisfied and channel a sufficient flow of funds toward the real economy to achieve the optimal mix of stable growth, stable employment, and a reasonable price rebound. We need to further improve the monetary policy transmission mechanism, promote relatively rapid growth in the supply of money and credit, and realize a reduction in overall financing costs. Financial institutions should receive guidance on improving technology finance, green finance, inclusive finance, pension finance, and digital finance. We should further leverage the coordinated financing mechanisms for micro and small enterprises to ensure that credit funds flow to the community level and can be quickly and conveniently accessed at appropriate interest rates. This will effectively alleviate the problem of small businesses finding it difficult, costly, and time-consuming to obtain financing. The RMB exchange rate should be kept basically stable at an appropriate, balanced level. Furthermore, experiments should be conducted into expanding the central bank’s macro-prudential and financial stability functions.

Enhancing policy coordination

We must continue to pursue economic growth while ensuring stability and promote stability through growth. We should uphold fundamental principles and break new ground, introduce new policies before abolishing the old, and strive to enhance integration and coordination. It is important to plan economic work from a strategic and holistic perspective in order to prevent policy conflicts. We should include economic and non-economic policies in evaluations of the consistency of macroeconomic policy orientation. All regions and departments must assess the potential economic impact of all policies they introduce, whether economic or otherwise. This will help generate powerful synergy for promoting high-quality economic development. We must enhance coordination throughout the entire policy formulation and implementation process, ensuring stronger collaboration between departments and across different levels of government at all stages, from first inception to final delivery, in order to eliminate all administrative impediments and increase the overall effectiveness of policies.

IV. Nine key tasks for economic work in 2025

First, we will vigorously boost consumption, improve investment efficiency, and expand domestic demand

We will implement dedicated initiatives to stimulate consumption and work to increase the incomes and ease the burdens of the low- and middle-income groups, so as to enhance their ability, willingness, and level of consumption. We will adopt multiple measures to create more favorable conditions and a better environment for consumption. We will keep the consumption of commodities stable, expand the scope of programs for large-scale equipment renewal and trade-in of consumer goods, and enhance support for the implementation of major national strategies and security capacity building in key areas. This will ensure an effective expansion in both consumption and investment. We will foster new areas of consumption growth, enhance services consumption, and develop new and diversified consumption scenarios. Active efforts will be made to develop the debut economy, ice and snow economy, and silver economy. We will stimulate private investment and make government investment effectively drive nongovernmental investment.

Second, we will drive the development of new quality productive forces through scientific and technological innovation and build a modern industrial system

We will make major efforts to promote integrated sci-tech and industrial innovation. This means to bolster basic research and strive for breakthroughs in core technologies in key fields, conduct large-scale demonstrations for the application of new technologies, products, and scenarios, launch an AI Plus initiative, and nurture industries of the future, such as biomanufacturing. We will improve the multi-tiered financial services system, do more to encourage the participation of nongovernmental funds in venture capital, and cultivate innovative enterprises through tiered support, including strong support for the development of more high-growth unicorn start-ups and gazelle companies. We will take comprehensive steps to address “race to the bottom” style competition, regulating behaviors among both local governments and enterprises, and using both market- and law-based approaches. We will implement stronger standards for technology, environmental protection, safety, and energy consumption to promote the sustainable and sound development of the “new trio,” namely, electric vehicle, lithium-ion battery, and solar battery sectors, along with other competitive industries, so as to consolidate our competitive advantages on the international stage.

Third, we will leverage the leading role of economic reform by ensuring that landmark reform measures are fully implemented and deliver results

We will strengthen the endogenous drivers of development by further deepening reform, introducing more reform measures to support stable growth, structural adjustments, and people’s wellbeing. We will complete the initiative to deepen and upgrade state-owned enterprise (SOE) reform in line with high-quality standards and introduce a private sector promotion law. A dedicated campaign will be launched to regulate enterprise-related law enforcement. To ensure the sound development of the platform economy, we will take steps to regulate algorithms and strengthen oversight. We will advance fiscal and tax structural reforms in a coordinated manner and place more fiscal resources at the disposal of local governments. We will carry out integrated investment and financing reforms in the capital market to remove barriers to the entry of medium- and long-term capital. A concerted effort will be made to foster an institutional environment friendly to long-term capital inflows and long-term investment from social security funds, insurance funds, annuities, and wealth management funds. In addition, we will effectively ensure the stability of capital markets.

Fourth, we will expand high-standard opening up while keeping foreign trade and foreign investment stable

We will make further progress in fostering a world-class business environment that is market-oriented, law-based, and internationalized, taking orderly steps to expand opening up in a voluntary and unilateral manner and promoting reform and development through high-standard opening up. We will steadily advance institutional opening up, improve the quality and efficiency of pilot free trade zones, and expand their mandate for reform tasks. Efforts will be made to implement core policies of the Hainan Free Trade Port at a quicker pace. Measures will be taken to actively develop trade in services, green trade, and digital trade, and reform of the systems and mechanisms for promoting foreign investment will be boosted. Pilot programs for opening up fields such as telecom, healthcare, and education will be expanded, as we steadily advance the opening of the service sector to the outside world and continue working to make China a favored destination for foreign investment. We will implement the plans made at the fourth symposium on the development of the Belt and Road Initiative to promote solid progress in high-quality Belt and Road cooperation. 

High-speed container cranes in operation at the fully automated terminal in Qingdao Port, Shandong Province, December 23, 2024. Following the principles from the Central Economic Work Conference, China will take orderly steps to expand opening up in a voluntary and unilateral manner and promote reform and development through high-standard opening up. CNS / PHOTO BY ZHANG JIN’GANG

Fifth, we will effectively prevent and defuse risks in key areas to ensure that no systemic risks arise

We will keep working to restore stability following a downturn in the real estate market. To unleash demand, we will focus on fully implementing city-specific policies and advancing the renovation of urban villages and dilapidated housing. We will ensure that demand for first homes and improved housing conditions is met. To improve supply, we will strictly control the supply of new housing, upgrade existing housing stock, and improve the quality of housing. We will appropriately control the supply of land for new real estate development and vigorously push ahead with urban renewal projects. We will make good use of existing land resources as well as commercial and office properties and facilitate their transformation. We will move ahead with creating a new development model for the real estate sector, establishing the relevant underlying systems in an orderly manner and working to ensure we develop good housing that matches people’s demand for a higher quality of life. We will give full play to the real estate financing coordination mechanisms for cities and increase the scope and effectiveness of white-list projects in order to further consolidate the momentum for restoring stability after the downturn. We will resolutely strive to ensure that unfinished housing projects are completed and speed up efforts to develop a financial services system tailored to the new development model for the real estate sector. Prudent steps will be taken to deal with risks in local small and medium-sized financial institutions, and coordinated efforts will be made by the central and local governments to crack down on illegal financial activities.

Sixth, we will pursue coordinated progress in new urbanization and all-around rural revitalization and promote integrated urban-rural development

The total area of China’s farmland must remain above the specified red line. We will ensure stability in the production and supply of grain and other key farm produce and increase the overall efficiency and competitiveness of agriculture. At present, China’s 13 major grain-producing regions account for about 75% of national grain output and around 90% of inter-regional grain transfers. It is vital to protect the initiative of grain growers and major grain-producing areas. To this end, we will improve the grain pricing mechanism and establish an inter-provincial mechanism for major grain-purchasing areas to compensate major producing areas. We will develop industries, empower counties, and enrich people in an integrated manner in line with local conditions and expand the channels for increasing rural incomes. We will advance new urbanization in a prudent and well-ordered manner based on the philosophy that our cities are for the people. We will develop modern metropolitan areas and further modernize the governance of super-large cities and megacities. We will vigorously boost the development of county economies and push forward with urbanization centered on county seats. To consolidate and build upon our achievements in the battle against poverty, we will improve the regular mechanisms for preventing rural residents from lapsing or relapsing into poverty. Furthermore, we will establish a tiered and category-based assistance system for rural low-income populations and underdeveloped regions to make sure that there is no large-scale lapse or relapse into poverty.

Seventh, we will reinforce the implementation of regional strategies and boost regional development vitality

We will fully harness the synergy between the coordinated regional development strategy, major regional strategies, and the functional zoning strategy, so as to actively foster new growth poles. China’s major economic provinces play a crucial role in the country’s overall economic development: The top 10 provinces by GDP account for over 60% of national economic output, the top 10 industrial provinces generate over 60% of the national industrial added value, and the top 10 provinces for trade represent over 80% of China’s total volume of imports and exports. We will strengthen support for major economic provinces in terms of production factors, such as land, energy, environmental resources, and data, to help them take on an even greater role. We will work to enhance the innovation capabilities and leading role of areas with economic development advantages. We will also encourage other regions to better leverage their local conditions and comparative advantages to drive development.

Eighth, we will make concerted efforts to cut carbon emissions, reduce pollution, pursue green development, and boost economic growth, in a bid to advance the green transformation of economic and social development

China has met its commitments to the international community on wind and solar power six years ahead of schedule, with the combined installed capacity exceeding 1.2 billion kilowatts. China’s installed alternative energy capacity now accounts for over one-third of the global total. Over recent years, China has supplied 60% of the world’s wind power equipment, 70% of photovoltaic modules, and over 70% of key raw materials for power batteries, making a major contribution to the drive to address global climate change. We will take further steps to reform the institutions for ecological conservation and accelerate efforts to build a Beautiful China. We will create a sound development ecosystem for green and low-carbon industries and cultivate new growth sectors such as eco-friendly construction. We will accelerate the development of new energy bases in China’s vast sandy areas, rocky areas, and deserts, where wind and solar resources are in abundant supply. We will advance the development of a national carbon market and establish a product carbon footprint management system and a carbon labeling and certification system. Efforts will continue to keep skies blue, waters clear, and lands clean.

Ninth, we will ensure and improve people’s wellbeing and give people a stronger sense of gain, happiness, and security

We will improve the basic public services system and establish an effective social security net. We will implement employment support plans for key sectors and industries, urban and rural communities, and micro, small, and medium-sized enterprises, and facilitate employment among key groups, such as college graduates. More will be done to protect the rights and interests of groups in flexible and new forms of employment. We will refine our industrial development and employment promotion policies aimed at assisting people who have been lifted out of poverty and ensure that the basic needs of people in difficulty are met. Pro-natal policies will be formulated. Steps will be taken to develop community-supported at-home eldercare and expand public-interest eldercare services. To ensure both development and security, we will improve work-place safety and effectively prevent and respond to social security incidents in a timely manner.

Han Wenxiu is Executive Deputy Director of the Office of the Central Commission for Financial and Economic Affairs and Director of the Office of the Central Leading Group for Rural Affairs.

(Originally appeared in Qiushi Journal, Chinese edition, No. 1, 2025)