The tone-setting Central Economic Work Conference (CEWC), held in Beijing on December 11 and 12, set priorities for economic work in 2024. A 4,355-character outline of the leadership’s plans for next year was released. It listed six areas for priority development: commercial spaceflight and advanced frontier technologies; the marine economy and becoming an oceanic superpower; developing the silver economy, turning demographic challenges into an opportunity; pushing sales of new and competitive domestic brands; protecting food security; and developing a more pragmatic work style, “establishing the new before abolishing the old”.
President Xi Jinping, who is also General Secretary of the Communist Party of China (CPC), delivered an important speech at the conference. While noting that China's economic recovery faces multiple challenges, the meeting stressed that favorable conditions for the Chinese economy outweigh unfavorable factors, and it called for enhanced confidence in China's economic recovery and long-term positive outlook. Despite lingering downside risks, measures will be taken to promote recovery in 2024, and China will remain one of the fastest-growing major economies, meeting participants said. The meeting reviewed China's economic work in 2023, studied the current economic situation and made plans for economic work in 2024. It noted that China's economy has achieved a recovery, with solid progress made in high-quality development in 2023. To further revive its economy, China still has to overcome some difficulties and challenges, including lack of effective demand, lackluster social expectations, rising complexity and the severity and uncertainty of the external environment, the meeting noted. Still, “the favorable conditions facing China's development are stronger than the unfavorable ones, and the basic trend of economic recovery and long-term improvement has not changed,” the meeting concluded. Economic policies in 2024 will be based on the principle of seeking progress while maintaining stability, promoting stability through progress, and prioritizing development before addressing problems. It called for more policies that are conducive to stabilizing expectations, growth and employment, the Global Times reports, adding that a GDP growth rate of 5% is achievable in 2024.
Chinese leaders announced a course correction in policy – favoring a more cautious tack while trying to avoid further disruptions to businesses and the economy at large. “Next year we must persist in seeking progress while maintaining stability, promoting stability through advancement, and establishing the new before abolishing the old,” said a statement following a Politburo meeting that set the tone for its economic priorities in 2024. Some analysts say the Politburo’s position signals that Beijing is favoring a step-by-step approach to developing the economy and tackling structural problems, with an eye on avoiding unintended side effects like those resulting from attempts to rein in property speculation and address high levels of local-government debt. Such rushed campaigns, they note, have a history of roiling markets. And they say the Politburo’s embrace of more stable policies in 2024 could, in turn, help stabilize the expectations of people and businesses.
Song Xuetao, Chief Macro-economic Analyst with Beijing-based TF Securities, said in a note that Beijing would aim to make policymaking and reforms more measured and stepwise, with sound planning. “For instance, the establish-the-new-before-abolishing-the-old approach to Beijing’s common-prosperity drive would mean growing the economy and wealth pie bigger before deciding how to redistribute the wealth,” Song said. “In decarbonization, this approach means China shall trial reliable new energy sources before phasing out coal and others.” He expected that Beijing will not rush reforms nor try to compress the complex process of resolving property sector woes and local government debt in a short time frame. “The policy touch going forward will be deft and mild,” Song said. Among the top priorities for economic work in 2024 is the call to continuously prevent and defuse risks in major areas, including the housing market, local government debt and small and medium-sized financial institutions. The meeting also urged to address the reasonable financing needs of real estate companies with different ownerships equally.
Industry analysts, who reviewed the leadership’s vision for next year announced at the Central Economic Work Conference, said China will likely sharpen its focus on the implementation of policies supportive of the private sector, including better market access, access to factors of production, fair law enforcement, and protection of rights and interests. More efforts will also be made to drive the development of elite small and medium-sized enterprises that specialize in niche markets, boast cutting-edge technologies and show great potential. This year’s conference also emphasized efforts to implement new mechanisms for cooperation between the government and sources of private capital. The country will support the participation of private capital in “new infrastructure” and other areas, the leadership said. Song Xiangqing, Professor of Government Management at Beijing Normal University, said private companies are expected to have more opportunities to play a big role in major national projects related to infrastructure, new urbanization, transportation and hydraulic engineering in the future.
The World Bank has estimated that China’s economy would grow 5.2% in 2023, propelled by a gradual recovery of consumer sentiment and policy stimulus, and is expected to expand by 4.5% in 2024, according to the latest China Economic Update.
This overview is based on reports by the Global Times, the China Daily and the South China Morning Post.
