Key meeting aims to stabilize China’s economy next year with proactive policies amid ‘triple push’

The file photo shows a view of the Lujiazui area of ​​Shanghai.Photo:Xinhua

Key Chinese policymakers on Friday emphasized economic “stability” to address a variety of challenges for the next year, ranging from shrinking demand and supply to downward pressure on the economic outlook, at a key meeting that sets the main political priorities for 2022, signaling the second economy is shifting to a more proactive, yet cautious fiscal policy, which is expected to support a slowing economy against a backdrop of global downward trend.

In a speech at the closely watched Central Economic Work Conference, Chinese President Xi Jinping reviewed the country’s economic work in 2021, analyzed the current economic situation and set the economic work for next year, according to a report by the Xinhua News Agency.

Key leaders praised the achievements in leading economic development and tackling the COVID-19 epidemic, while speaking about the challenges facing the country, providing a rare window to domestic and global market observers on reading by Chinese leaders of the world’s second-largest economy.

The meeting prioritized stability, a word that has been mentioned 25 times according to the Global Times calculation, for 2022, promising to improve people’s livelihoods, stabilize the macroeconomy and maintain social stability. He also highlighted the continued efforts to deepen reform and opening up, and adhere to innovation-driven development for high-quality development.

In line with expectations, the meeting underscored a proactive fiscal policy for next year, noting that the policy should improve efficiency and be more faithful to sustainability, in order to ensure the intensity of budget spending.

File photo: Xinhua

File photo: Xinhua

Seemingly a targeted move to clarify misinterpretations on the country’s recent regulatory measures across a range of sectors, the meeting said there will inevitably be various forms of capital in the socialist market economy, and there is a need to fully play the positive role of capital, while effectively controlling its negative role.

China will set up “traffic lights” for capital, tighten capital surveillance in accordance with the law, and prevent sudden capital growth, the meeting said.

The meeting also reiterated China’s determination to tackle long-term challenges, such as a shift to clean energy and cracking down on real estate speculation, but also cautioned against a one-size-fits-all approach.

For example, the meeting said that the withdrawal of traditional energy should be based on the safe and reliable replacement with new energy.

Regarding the real estate market, the meeting also called for efforts to explore new development models for the industry such as the development of a long-term rental housing market, the promotion of affordable housing construction , supporting the commercial housing market to better meet the reasonable housing needs of buyers and foster a virtuous and stable cycle for the industry.

Workers use a crane to load a container in the Jingtang port area of ​​Tangshan Port, north China's Hebei Province, February 21, 2020. Photo: Xinhua

Workers use a crane to load a container in the Jingtang port area of ​​Tangshan Port, north China’s Hebei Province, February 21, 2020. Photo:Xinhua

Focus on stability

In keeping with a long tradition, the annual meeting was held from Wednesday to Friday in Beijing this year. This year’s event also came after warnings from officials and economists about headwinds in the economy and slowing growth in the second half of the year.

While fully affirming the achievements of 2021, the meeting specifically highlighted the triple pressure facing the Chinese economy, namely shrinking demand, supply shocks and weakening expectations.

The meeting also spoke of an increasingly complicated external environment, which has become more complex, harsh and uncertain.

No matter how the international situation develops, China must resolutely do what it wants, continue to strengthen its economic base, strengthen its capacity for technological innovation, adhere to multilateralism, take the initiative to normalize economic rules. and international trade and promote high-level reforms. openness and high-quality development, the meeting said.

China’s annual economic growth will exceed the expected 6% target this year, even against a backdrop of a slowdown in the third quarter. But the downward pressure on China’s economic growth will be enormous next year, Li Chang’an, a professor at the School of Public Administration at the University of International Business and Economics, said on Friday. Global Times.

China’s GDP grew 4.9% in the third quarter of 2021, slowing from previous quarters amid growing economic challenges, including an electricity crisis and supply chain bottleneck global. Growth is slightly below market expectations, which place it at 5%.

In the first three quarters, China’s GDP grew 9.8 percent from the same period a year earlier to reach 82.3 trillion yuan ($ 12.8 trillion).

“In particular, the employment situation will be ‘quite difficult’ next year, which poses a great challenge to the country’s economic growth,” Li said.

By 2022, the number of university graduates in China is expected to be 10.76 million, an increase of 1.67 million. It is also the first time that the number of college graduates has exceeded 10 million.

Clarify the confusion

The meeting, which was at the center of not only China but also the world, fell short of the expectations of many foreign media who anticipated a loosening of the grip on the real estate sector.

Analysts have warned that the wrong estimate is a misinterpretation of China’s current situation. Tian Yun, a Beijing-based economist, told the Global Times on Friday that there was no need to exaggerate Evergrande’s debt problem, noting that it is a one-company problem. which does not represent the macroeconomic situation of the real estate sector, nor create systemic risks for the financial system.

Analysts also warned that China’s proactive policy reflects the philosophy of being “both flexible and precise,” as China’s economic conditions, with declining third-quarter GDP growth, increase. requirements to stimulate investment and provide liquidity to the real economy. . China has not flooded the market or over-stimulated the economy by increasing the money supply, which means monetary policy is still stable, they said.

China’s roll-out of a more proactive fiscal policy comes at a time when the United States is accelerating its reduction, showing that China’s monetary policies are “centered on its own needs” instead of “dancing with it. others”.

Tian mentioned that the foreign market is a very powerful driving force for the Chinese economy. Without any stimulus next year, China’s economic growth rate may still exceed 5%.

Next year, China may still have enough confidence and tools to ensure the steady growth of the economy, Tian noted.


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