China’s development is its biggest political priority, Beijing said after its just-concluded annual tone-setting economic conference, signalling what could be a strong tilt towards economic growth in 2024.
And to that end, leadership pledged to orchestrate a variety of pro-growth policies and ramp up their coordination, including that of non-economic departments, to deliver much-needed economic stability in a time of considerable uncertainties and headwinds.
The meeting took place as Beijing stands at a critical juncture in its efforts to consolidate the nation’s economic recovery, revive business confidence and bolster new sectors, including the digital economy, to power economic growth over the long run.
China is trying to stay on a path toward doubling its gross domestic product (GDP) by 2035, relative to 2020 levels – meaning the economy must grow by at least 4.8 per cent annually.
“We will unveil more policies that are able to stabilise expectations, growth and jobs,” the readout said.
Leadership has acknowledged that insufficient demand, overcapacity in some industries, and weak expectations were major risks hampering growth.
“Beijing realises that it cannot rely solely on strong stimulus policies to boost social expectations. It needs to create an internal impetus for the economy through greater reforms and opening up,” said Ding Shuang, chief Greater China economist at Standard Chartered Bank.
There are obstacles in domestic circulation, and uncertainties in the external environment have increased, the statement said.
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To enhance consistency in macroeconomic policies, Beijing will incorporate non-economic policies into the overall consistency assessment.
“It is necessary to strengthen the coordination and cooperation of fiscal, monetary, employment, industrial, regional, science and technology, environmental protection and other policies,” the statement said, adding that China must “strengthen economic publicity, guide public opinion, and play up the bright prospects of China’s economy”.
And in their latest attempt to address concerns among foreign investors, policymakers vowed to expand market access to the telecoms and medical-care sectors, and address issues related to cross-border data flow and government-procurement practices.
China’s economy has struggled to find its footing in the past year, after loosening pandemic restrictions that had suppressed economic growth. A worsening property sector continues to be the biggest drag, despite Beijing’s best efforts.
Other challenges for the upcoming year include getting people to spend money again, weak external demand and simmering geopolitical tensions, according to economists.
During the two-day meeting, authorities prioritised tech innovation, with an emphasis on upgrading traditional industries and improving the resiliency and security of key manufacturing chains.
“It is necessary to promote industrial innovation through scientific and technological innovation, especially subversive and cutting-edge technologies, to spawn new industries, new models and new momentum,” the statement said.
Beijing also vowed to enhance food security, with agricultural improvements.
“It takes many departments to tear down barriers to easier entries for foreigners, and it remains to be seen if non-economy departments will be quick to implement and work in tandem with economic departments,” said Alex Ma, a professor of public administration at Peking University.
Beijing has also acknowledged that issues involving coordination between several government departments may also be affecting the economy’s performance, Ma noted.
“We will see more top-down coordination,” Ma said.
The annual meeting often sets an economic growth target for the coming year, but that number is likely to remain known only to party elites before they solicit views among advisers and economists.
The GDP target, together with the fiscal deficit ratio, local bond quota and unemployment control target, will be officially released and then approved at the annual gathering of the National People’s Congress in March.
“Next year, China will rely more on the financial strength of the central government, as the current local debt problem is severe, and local government finances are tight,” said Ding at Standard Chartered Bank.
China Economy – South China Morning Post China’s development biggest political priority 2024
