BEIJING: China will step up policy adjustments to support an economic recovery in 2024, state media said on Tuesday (Dec 12), following an agenda-setting meeting of the country’s top leaders.
Investors are closely watching for clues on next year’s policy and reform agenda as Beijing has been struggling to spur a post-pandemic economic recovery amid a deepening housing crisis and mounting local government debt.
China will focus on boosting effective demand next year, and make concerted efforts to expand domestic demand, state media said, citing the annual Central Economic Work Conference held from Dec 11 to 12, during which top leaders set economic targets for 2024.
China will strengthen counter-cyclical and cross-cyclical macro policy adjustments, state media said.
“To further promote economic recovery, we need to overcome some difficulties and challenges,” state media said. “The main problems are insufficient effective demand, overcapacity in some industries, weak public expectations, and many hidden risks.”
China will stick with a proactive fiscal policy and a prudent monetary policy next year, state media said.
The Politburo, a top decision-making body of the ruling Communist Party, said on Friday that fiscal policy would be moderately strengthened and will be “flexible, moderate, precise, and effective” to help spur the economic recovery.
Authorities will “consolidate and enhance the economic recovery”, aiming for reasonable economic growth next year with an emphasis on higher quality expansion, state media said.
Prior to the meeting, government advisers had told Reuters they would recommend economic growth targets for 2024 ranging from 4.5 per cent to 5.5 per cent, with the majority favouring a target of around 5 per cent – the same as this year.
Top leaders traditionally endorse a growth target at the December meeting, which is then publicly announced at the opening of the annual parliament meeting, usually held in March.
China’s growth is see on track to hit the government’s target of around 5 per cent this year.
Last week ratings agency Moody’s slapped a downgrade warning on China’s credit rating, saying costs to bail out debt-laden local governments and state firms and control its property crisis would weigh on the growth outlook.
Top leaders also pledged “to facilitate stability through progress”, which may signal greater emphasis on growth, and “establish first before demolishing”, which could indicate more support for the troubled property sector.
China plans to implement structural tax and fee cuts, and looks to new round of fiscal and tax reforms, state media said.
China will speed up the establishment of a new model of property development, quickening the construction of affordable housing, and coordinate the resolution of local debt risks and stable development, according to state media.