ECONOMIC China's top economic conference expected to prioritize stable growth,...

China’s top economic conference expected to prioritize stable growth, tackling risks in 2024

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As the world continues to face a severe economic downturn and various economic indicators in China reflect both a steady recovery trajectory as well as ups and downs in the Chinese economy, global attention is turning to an all-important end-of-year meeting to see how top Chinese policymakers view China’s economic prospects and top priorities for 2024. 

The Central Economic Work Conference is usually held in mid-December and sets the tone for economic policymaking for the coming year. As a crucial prelude for the conference, a meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee on Friday suggested that policymakers will likely prioritize policies to further consolidate the economic recovery to ensure reasonable growth, continue to address major risks and boost new emerging sectors to ensure high-quality development, analysts said on Sunday. 

In general, while China’s economy will continue to face both external and internal risks and challenges, the upward recovery trajectory will likely continue and further consolidate thanks to strong resilience of the Chinese economy and plenty of policy tools and rooms for Chinese policymakers to effectively tackle downward pressure, analysts predict. The world’s second-largest economy will remain the main growth driver for global growth for 2024, in which the global economy is expected to see major downward risks, they noted. 

Setting the tone

As of Sunday, information regarding the closed-door Central Economic Work Conference remains scarce. An official readout of the meeting is usually released after the meeting. Some signs indicate that the meeting may be forthcoming. Firstly, it is usually held in mid-December. Last year’s conference was held from December 15 to 16, and pledged a series of measures to tackle risks and promote an overall improvement in economic operations in 2023. 

Also a crucial harbinger for the annual tone-setting conference is a meeting of the Political Bureau of the CPC Central Committee, which focuses on the economic work in the coming year and comes shortly before the conference. On Friday, the Political Bureau held the meeting to analyze and study the economic work of 2024, arrange Party conduct and anti-corruption work, and review regulations on the CPC’s disciplinary action, the Xinhua News Agency reported. The political bureau meeting is usually regarded as a reliable window into what might be in store for the economic work conference, analysts noted. 

“The Political Bureau meeting usually sets the tone for the Central Economic Work Conference, and policy signals from the Political Bureau meeting will generally be further refined at the Central Economic Work Conference,” Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Sunday. 

Signals from the Political Bureau meeting on Friday suggested that priorities will be placed on consolidating the economic recovery, tackle risks and promote high-quality development in 2024, according to analysts. 

The meeting stressed that it is important to boost economic vitality, prevent and mitigate risks, improve social expectations, consolidate and promote the momentum of economic recovery, and effectively improve the quality of the Chinese economy and promote its growth within a reasonable range, according to Xinhua. The meeting also emphasized the general principle of seeking progress while maintaining stability.

Yao Jingyuan, a special researcher of the Counselors’ Office of the State Council, said that as China’s economy will continue to face many internal and external challenges in 2024, seeking progress while maintaining stability will remain the overall tone for next year.

“What I’m saying is that our economic work must respect the laws of economics, be rational and not anxious. In this case, we must persist in making progress while maintaining stability, proceed step by step, and resolve risks and problems during the process of development,” Yao told the Global Times. 

Yao noted that in terms of addressing risks and challenges, China will continue to focus on issues in the real estate market, local government debt and supporting the private sector in 2024. “These are problems that we will face next year and we will be able to address them and maintain relatively good economic growth.”

While neither the Political Bureau meeting nor the Central Economic Work Conference offers a specific growth target, the tones will suggest that policymakers will take stronger efforts to consolidate the recovery and ensure stable growth, analysts said, pointing to various policy pledges from Friday’s meeting. 

Stronger policy support

The meeting said that proactive fiscal policies should be appropriately strengthened and improved in quality and efficiency, while the prudent monetary policies should be flexible, appropriate, precise, and effective.

These pledges signal that policymakers will likely step up both fiscal and monetary policy support for the economy in 2024, analysts noted. 

Pointing to lingering downward pressure, Tian Yuan, a Beijing-based economist, said he expects more stimulus policies for next year. “The Central Economic Work Conference will likely arrange a package of policies to ensure continued economic recovery next year,” Tian told the Global Times.

The focus of stimulus policies will be on consumption, analysts noted. The Political Bureau meeting on Friday also stressed that it is imperative to intensify macro regulation, expand domestic demand and deepen supply-side structural reform.

“Judging from the signals from the meeting, boosting consumption will be a top priority,” Hu said, noting that consumption’s contribution to economic growth reached 80 percent in the first 11 months of 2023. “So next year we will likely introduce some stimulating policies, which may boost consumption.”

Priorities will also be given to boost new emerging industries to foster new growth engines to ensure high-quality development, analysts noted, pointing to various references from the readout of Friday’s meeting. 

The meeting noted that it is also essential to accelerate the forging of a new development paradigm, focus on promoting high-quality development, comprehensively deepen reform and opening up, and build self-reliance and strength in high-level science and technology. It also urged efforts to establish the new before abolishing the old, which, analysts say, refers to the focus on fostering new growth models.

Despite various risks and challenges in 2024, the Chinese economy is expected to remain one of the fastest-growing among major economies and the main driver for global growth, analysts said. Some international organizations have also raised their growth projections for China, even as they lowered forecasts for global growth. Last week, the IMF said that the Chinese economy is expected to reach the growth target of around 5 percent in 2023 and reaffirmed an October upward revision of China’s growth projection for 2024 from 4.2 percent to 4.6 percent.

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