中文
Tourists visit a historical and cultural district along the Grand Canal in Wuxi, east China's Jiangsu Province, May 2, 2024. [Photo/Xinhua]
By Matteo Giovannini
China's annual Central Economic Work Conference (CEWC), which concluded in Beijing on December 12, has set the economic tone for 2025 amidst global uncertainties and domestic challenges. It underscored a commitment to reinforcing economic resilience, boosting domestic demand and sustaining high-quality development. These policy signals are no mere tactical adjustments but represent a strategic reaffirmation of China's developmental goals under its 14th Five-Year Plan for the 2021-2025 period.
A key takeaway from the CEWC is the government's willingness to adopt a more expansionary fiscal stance. By raising the fiscal deficit ratio and expanding treasury bond issuances, China's leadership seeks to inject liquidity into the economy, stimulate consumption and fund infrastructure projects. This shift comes at a crucial time, as external headwinds, including geopolitical tensions and sluggish global growth, continue to weigh on China's export-dependent industries.
Parallel to fiscal policies, monetary easing has also been emphasized. Policymakers hinted at further rate cuts and a reduction in banks' reserve requirement ratio, aimed at increasing credit availability and reducing borrowing costs. Such measures will encourage businesses and consumers to invest and spend, reinforcing domestic demand as a pillar of economic stability.
Fiscal expansion and monetary easing demonstrate a coordinated approach to economic management, balancing short-term stimulus with long-term sustainability. By synchronizing these measures, policymakers aim to counteract global economic uncertainties while maintaining internal economic stability.
Chinese President Xi Jinping, who chaired the CEWC, emphasized the critical role of consumption in driving China's economic recovery and growth. With consumption already contributing 49.9 percent to economic growth in the first three quarters of 2024, according to data from the National Bureau of Statistics, the meeting's focus on campaigns to boost consumer spending aligns with current trends.
To achieve this, the government plans targeted measures, such as stimulating demand for smart home appliances, green technologies and health-related products. Investment in entertainment, tourism and cultural sectors will diversify and strengthen the consumption landscape. Additionally, policymakers highlighted efforts to increase incomes, expand the middle-income group and optimize the overall consumption environment.
At the heart of the policy blueprint lies a commitment to high-quality development, a hallmark of Xi's economic vision. The conference called for innovation to lead industrial transformation, with strategic support for emerging sectors like quantum technology, life sciences and low-carbon industries. Investments in green technologies, including renewable energy and electric vehicles, not only align with China's climate goals but also position the country as a global leader in the green economy.
This focus on quality over quantity reflects a strategic pivot from the rapid growth model of the past to a more sustainable and innovation-driven framework. By prioritizing technological self-reliance and eco-friendly development, China aims to mitigate vulnerabilities in global supply chains and address environmental concerns simultaneously. Such initiatives are expected to foster long-term economic resilience and international competitiveness.
Xi Jinping, general secretary of the Communist Party of China Central Committee, Chinese president and chairman of the Central Military Commission, delivers an important speech at the annual Central Economic Work Conference that was held from Wednesday to Thursday in Beijing, capital of China. [Photo/Xinhua]
While China's economic fundamentals remain strong, as emphasized during the CEWC, challenges persist. Geopolitical tensions, supply chain disruptions and domestic issues like real estate volatility present significant hurdles.
The acknowledgment of these risks underscores the government's realistic appraisal of the economic landscape. By emphasizing "potential dangers" and outlining measures to address systemic risks, the conference reinforced its commitment to proactive risk management. Moreover, campaigns to reinvigorate the private economy and improve market access signal a balanced approach to fostering innovation while mitigating financial risks.
China's economic strategy for 2025 places equal importance on stimulating demand and promoting productive investment. The meeting emphasized government spending as a lever to drive investment in critical areas like infrastructure, digital transformation and green technologies. Simultaneously, private sector participation will be encouraged through improved investment mechanisms and partnerships.
Digital consumption, cultural industries and sports events were highlighted as key areas of growth. These sectors not only have high domestic potential but also serve as catalysts for broader economic activity. Meanwhile, improving household incomes and expanding the scale of the middle-income demographic remain fundamental to creating a virtuous cycle of consumption and production.
China's policy directions for 2025 will also have far-reaching implications for global investors and businesses. The push for a consumption-led recovery, coupled with targeted support for high-tech and green industries, presents opportunities for foreign firms aligned with these priorities. Continued monetary easing could stabilize capital markets and enhance investor confidence.
Xi's remarks reflect a nuanced and forward-looking economic strategy. By leveraging fiscal and monetary tools, promoting consumption and prioritizing innovation and green growth, China aims to navigate short-term challenges while laying a robust foundation for long-term development.
As China enters a pivotal year in its five-year plan, the policies provide a clear roadmap for achieving its dual goals of stability and transformation. These measures not only address immediate economic concerns but also reaffirm China's commitment to a sustainable and inclusive growth model. For domestic and global stakeholders, this strategic outlook offers a blend of challenges and opportunities as China continues to shape its economic trajectory in a rapidly changing world.
Matteo Giovannini, a special commentator on current affairs for CGTN, is a finance professional at the Industrial and Commercial Bank of China, a non-resident associate fellow at the Center for China and Globalization and a member of the Global Young Leaders Dialogue.
