The high-level three-day Central Economic Work Conference (CEWC), chaired by President Xi Jinping, concluded last week, emphasizing economic stability, curtailing monopolies and ensuring the healthy development of the real estate market.
The overriding theme was ensuring stable economic development. The word “stability” was mentioned 25 times in the summary of the meeting. China's economy is facing three pressures: demand contraction, supply shock and weakening expectations. Due to the Covid-19 pandemic, the external environment has become more complicated, severe and uncertain. However, the meeting was confident that China's economy is highly resilient and that its long-term positive fundamentals would not change. Chinese President Xi Jinping reviewed the country's economic work in 2021, analyzed the current economic situation, and set targets for next year's economic work, according to Xinhua News Agency.
The meeting emphasized maintaining fiscal expenditure, usually summarized in the stock phrase “proactive fiscal policy and a prudent monetary policy”, which should improve efficienc. Next year, the government will strengthen support for small and medium-sized enterprises, and individual industrial and commercial households. There would also be new tax cuts. Infrastructure investment will be accelerated to finish projects ahead of schedule. Oil exploration will be intensified and the building of waste recycling facilities accelerated. In agriculture, the focus is on improving the seed industry and agricultural machinery. “Chinese people's rice bowls should be firmly in their own hands at all times.” The meeting emphasized financial discipline and the need to reduce the debts of local governments. Banks and other financial institutions should increase their support for the real economy, especially small and micro enterprises, technological innovation and green development. Withdrawing traditional energy should be based on the safe and reliable replacement by new energy.
The meeting called for setting up a mechanism of “green and red lights” to strengthen effective oversight over capital. It called for the prevention of the “wild growth” of capital. Sectors that are monopolistic in nature, such as power grids and railways, will be reformed and foreign businesses will be offered equal treatment with their domestic counterparts and encouraged to invest in the sectors. Fair competition should be achieved through fair supervision.
The rental housing market will be stimulated and more affordable housing projects will be launched. The policy of “houses are for living in, not for speculation” is reemphasized. Support for the commercial housing market should lead to better meeting the reasonable housing needs of buyers. Many people in need of a home can't afford one due to the high and still rising housing prices. A three-year action plan for the development of science and technology was approved with the aim of strengthening China's capacity for scientific and technological innovation.
Finally, the goal of achieving “common prosperity” was discussed. To achieve common prosperity, we must first make the cake bigger and better before dividing it well through reasonable institutional arrangements. This is a long-term historical process, and we should steadily move towards this goal, the meeting concluded. No matter how the international situation changes, China must unswervingly do its own thing, continue to strengthen its economic foundation, strengthen technological innovation capabilities, adhere to multilateralism, take the initiative to standardize international economic and trade rules, and promote reforms with high-level openness and high-quality development, according to a summary by the Global Times.
This overview is based on reports by the China Daily, Global Times, Shanghai Daily and the Sinocism Newsletter.
