Coordinate Major Relationships in Economic Work

Coordinate Major Relationships in Economic Work*

December 11, 2024

The year 2024 is critical for achieving the objectives and tasks laid out in the 14th Five-year Plan. In the face of mounting external pressure and increasing internal difficulties, the CPC Central Committee has rallied the entire Party and led the people of all ethnic groups in a constructive response supported by comprehensive policy measures. As a result, our economy has maintained a stable and upward trajectory on the whole. Solid progress has been made in high-quality development, and we remain on schedule to achieve our major social and economic goals. We have made firm strides in advancing Chinese modernization on the foundations of our growing economic strength, scientific and technological capabilities, and composite national strength.

This year has been anything but ordinary, making our achievements all the more encouraging. First, the economy experienced strong growth momentum at the start of the year, followed by a slowdown in the middle, and a rebound towards the end. The first quarter began well, while the second and third faced increasing downward pressure. A package of targeted new policies decisively rolled out by the Political Bureau of the CPC Central Committee on September 26 effectively boosted the real estate and stock markets, general market expectations, and public confidence, which resulted in a noticeable upturn of the economy, contributed to achieving the year-end target, and laid solid foundations for further growth in 2025.

Second, steady progress has been made in developing new quality productive forces, with significant advances in sci-tech innovation in such fields as integrated circuits, artificial intelligence, and quantum technology. Sustained progress has been made in smart and digital transformation of traditional industries, and transition towards a green and low-carbon economy has accelerated.

Third, reform and opening up has continued to expand. Plans to drive deeper comprehensive reform and advance Chinese modernization were made at the Third Plenary Session of the 20th CPC Central Committee. We have witnessed solid progress in high-quality Belt and Road cooperation, positive results in high-standard opening up, and a growing contribution of exports to economic growth.

Fourth, risks in key sectors have been defused in an orderly and effective manner. Positive changes are emerging in the real estate market, and risks involving local government debt and small and medium-sized financial institutions are being effectively mitigated and controlled.

Fifth, the people’s wellbeing has been guaranteed. We have kept employment and prices stable, and consolidated and expanded our achievements in poverty alleviation. Grain output exceeded 700 million tonnes for the first time on record, our eco-environment has continued to improve, and social stability has been maintained. These achievements have made us all the more determined and confident in forging ahead despite challenges and difficulties to advance Chinese modernization on the new journey in the new era.

In reviewing the situation, it is important to address both sides: celebrating our successes while thoroughly addressing outstanding problems. Currently, the negative impact of the deteriorating external environment poses numerous challenges to our economy. These include insufficient domestic demand, a squeeze on business operations for some enterprises, pressure on employment and income growth, and unresolved risks and hidden troubles in some sectors. On the other hand, we must recognize that the conditions for and underlying trends of long-term growth have not changed, as our economy benefits from solid foundations, multiple advantages, strong resilience, and great potential. I am convinced that there will always be more solutions than difficulties so long as we remain steadfast and confident. We must face difficulties squarely, reinforce confidence, and work hard to turn all positive factors into tangible results in development.

Experience has expanded our understanding of the laws that govern economic work. The broadest consensus reached within the Party is that the centralized, unified leadership of the Party Central Committee guarantees the success of our economic efforts. At critical and historic junctures, the CPC Central Committee has formulated decisions based on timely research and assessment of evolving conditions to ensure that the ship of the Chinese economy maintains a steady course through rough seas to reach its destination. With a multitude of complex tasks at hand, we must coordinate the following major relationships.

First, we must coordinate the role of a well-functioning market and that of a capable government to form an economic order that allows a robust market and subjects it to proper regulation. To this end, the government should play its due role without overstepping its bounds. It must continue to strengthen credibility and the rule of law in economic development, improve the rules of the market and set an example in following them, and combat corruption and maintain public security to improve the market environment. It should strive to remedy market failures, ensure orderly competition, and make the unified national market a level playing field for all market entities. To refrain from overstepping its boundaries, the government should respect the market’s decisive role in resource allocation and let it play this role, avoid improper intervention in the activities of micro entities, and prevent regional protectionism and the fragmentation of local markets. The better the regulation of government involvement, the more efficient the market will become.

Second, we must balance overall supply and demand to ensure smooth economic flows nationwide. We should continue to coordinate supply and demand to achieve a dynamic balance. To better match and balance supply and demand, we should extend supply-side structural reform — supporting and promoting industries that are strategic and critical, and restricting and phasing out industries that are outdated or surplus to need. Expanding domestic demand is not a stopgap but a strategic measure that bears on both economic stability and security. We must boost domestic demand — in particular consumption — making it a key driver of economic growth and a stabilizer of the economy.

Third, we must foster new growth drivers while upgrading old ones, and develop new quality productive forces suited to local conditions. Driven by scientific and technological innovation, we will develop and expand emerging and future industries to gain an edge in international competition, create new growth drivers, and build new strengths. Concurrently, in order to achieve a smooth and sustainable transition from old to new growth drivers, we will further transform, upgrade, and revitalize traditional industries, which have served as the primary sources of economic growth, jobs, and incomes.

Fourth, we must revitalize available resources while optimizing new ones to maximize allocation efficiency. We should strengthen the management of both assets and liabilities, coordinate the use of existing and new resources, and unlock new growth potential by tapping into underutilized resources. We will continue to encourage the upgrading of industrial parks, and take advantage of the policies for replacing existing hidden debts with refinancing bonds and developing idle and inefficiently used land. This will allow us to maximize the value of existing resources and better leverage new ones in a coordinated way, keep assets in good management, adjust liabilities, and open up new prospects for development.

Fifth, we must improve the quality of development while growing the economy to reinforce the material foundations of Chinese modernization. Our exceptional economic size, market scale, and industrial support capacity are all conducive to improving the quality and strength of the economy. However, our per capita income has yet to reach the global average, and we still face the prominent issue of imbalanced and insufficient development. We should focus on quality while maximizing our economies of scale, leverage the advantage of our vast market and diverse application scenarios to nurture more world-class enterprises and leading technologies, and raise product and service quality and economic scale through the whole process of high-quality development.

* Part of the speech at the Central Conference on Economic Work.

(Not to be republished for any commercial or other purposes.)