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.

Editor: Li Xiaoqiong