Six key points to watch as China plans its 2025 economic roadmap

* Multipronged policy announcements from the recently held Central Economic Work Conference have shown the direction and priorities of economic planning for the world's second-largest economy for next year.
* More proactive macro policies, measures to boost domestic demand, efforts to stabilize the property market and expand opening up, and more, aim to support stable economic growth, safeguard jobs and consumer prices, boost people's income, and enhance China's appeal to foreign investors.
* In the latest episode of the China Economic Roundtable, an all-media talk show hosted by Xinhua News Agency, guest speakers shared insights on the meeting's key policy highlights across six critical aspects and their anticipated impact on the Chinese economy and beyond.
 

BEIJING, 20 December 2024 (Xinhua) -- China's recently held Central Economic Work Conference has outlined major tasks for 2025, offering insights into the direction and priorities of economic planning for the world's second-largest economy for next year.

Analysts believe the multipronged policy announcements from the meeting -- including the adoption of more proactive macro policies, measures to boost domestic demand and efforts to stabilize the property market -- will support stable economic growth, safeguard jobs and consumer prices, boost people's income, and enhance China's appeal to foreign investors.

Guest speakers featured in the latest episode of the China Economic Roundtable, an all-media talk show hosted by Xinhua News Agency, shared insights on the meeting's key policy highlights across six critical aspects and their anticipated impact on the Chinese economy and beyond.

MAINTAINING STABLE ECONOMIC GROWTH

While acknowledging the intensified challenges posed by changes in the external environment and ongoing difficulties within the economy, China has committed to maintaining stable economic growth, according to the meeting. The speakers believe this commitment sends a strong signal to support continuous economic recovery and boost social confidence.

Official data showed that in November, the impact of combined policy measures continued to unfold, delivering strong results in key economic indicators such as industrial output, investment, consumption and services.

 Guests communicate at the 2024 China Private Enterprises Investment and Financing Conference in north China's Tianjin Municipality, Nov. 13, 2024. (Xinhua/Zhao Zishuo)

Liu Rihong, an official from the Research Office of the State Council, noted that by acknowledging its difficulties and challenges, China is confronting these issues head-on with a determination to resolve them. "The economy has shown gradual improvement since the fourth quarter. With the convening of the conference and the continued impact of existing policies alongside new measures, I believe the overall upward momentum of the economy will further strengthen."

According to Xu Wei, a researcher with the Development Research Center of the State Council, the Chinese economy has built significant advantages through long-term development, with new urbanization, green initiatives and digitalization continuing to drive demand. He noted that the economy has a solid foundation to withstand external uncertainties and achieve sustained recovery.

ADOPTING A MORE PROACTIVE FISCAL POLICY

According to the meeting, China will adopt a more proactive fiscal policy and set a higher deficit-to-GDP ratio, increase the intensity of fiscal spending, increase the issuance of ultra-long special treasury bonds and local government special-purpose bonds, and optimize fiscal expenditure structure.

Liu expects the more proactive fiscal policy to be reflected in both scale and speed, noting that the measures outlined signal an increase in the scale of fiscal actions. He emphasized the importance of accelerating the release and allocation of fiscal funds to ensure they are swiftly implemented in projects, leading to tangible progress.

 People visit the Light of Internet Expo in Wuzhen, east China's Zhejiang Province, Nov. 19, 2024. (Xinhua/Huang Zongzhi)

The conference also stressed optimizing fiscal spending structure and improving the efficiency of fund utilization by paying more attention to improving people's livelihood, promoting consumption and sustaining growth momentum. "I think this orientation in optimizing the fiscal spending structure also forms a key part of a more proactive policy," Liu said.

IMPLEMENTING MODERATELY LOOSE MONETARY POLICY

On the meeting's pledge to implement a moderately loose monetary policy next year, Huang Hanquan, head of the Chinese Academy of Macroeconomic Research, said China had maintained a prudent monetary policy since 2011, and that the shift from "prudent" to "moderately loose" in the policy stance is conducive to providing a better liquidity environment for economic recovery and boosting market confidence.

He added that the shift has stemmed from the need to boost domestic demand, promote a moderate rebound of consumer prices and prevent financial risks, and is in line with a gradual shift to more loose monetary policies in advanced economies.

Huang noted that in addition to reducing reserve requirement ratios and bank interest rates, the loose monetary policy should also involve the innovation of financial tools aimed at channeling more capital into the development of new quality productive forces, industrial upgrades and green development, in line with the nation's economic restructuring efforts.

BOOSTING DOMESTIC DEMAND ON ALL FRONTS

China considers expanding domestic demand a "strategic move," which can help the country cope with external shocks and ensure stable economic performance while enhancing the momentum for longer-term development.

The country should strive to enhance people's purchasing power and willingness to consume through various policy incentives, foster new drivers for consumption growth, and unleash the potential of domestic demand through reforms, Liu said.

 Customers apply for subsidies under the trade-in program for consumer goods in Hangzhou, east China's Zhejiang Province, Oct. 31, 2024. (Xinhua/Xu Yu)

Funds raised through ultra-long special treasury bonds to promote large-scale equipment upgrades and trade-ins for consumer goods will increase substantially next year compared to 2024, an official from the Office of the Central Committee for Financial and Economic Affairs told reporters in an interview.

STABILIZING REAL ESTATE MARKET

As one of the key tasks for 2025 outlined at the meeting, China vowed to intensify efforts to reverse the downturn and stabilize the real estate market, which is already showing positive signs of stabilization.

Detailed policies include advancing the renovation of shanty towns in cities and dilapidated houses, reasonably controlling the supply of newly added real estate land, making good use of existing land resources as well as commercial and office properties, fostering a new development model for the real estate sector and establishing relevant foundational systems in an orderly manner.

These policies will contribute to sustaining the momentum of improvement in the market, and further enhance market confidence and development impetus, said Liu Lin, a researcher with the Chinese Academy of Macroeconomic Research.

EXPANDING OPENING UP

Against the backdrop of rising unilateralism and protectionism in the world economy, China, a major trading partner of more than 150 countries and regions, vowed to expand high-standard opening up while keeping foreign trade and foreign investment stable next year.
Liu Rihong said China should take the opportunity of developing the pilot free trade zones and Hainan Free Trade Port to actively align with high-standard international economic and trade rules, and continue to deepen opening up.

Amid efforts to expand foreign investment, the country will expand the pilot programs in opening up such fields as telecommunications and healthcare, while steadily advancing the opening of service sectors including internet and culture, according to the Office of the Central Committee for Financial and Economic Affairs. 

(Video reporters: Sun Lei, Gu Lu, Wa Yang, Shan Weiyi, Zhang Fan, Ma Zhiyi, Liu Yuxuan and Pan Geping; Video editors: Zheng Xin and Zhao Xiaoqing)