Analysts predicted China to appropriately strengthen its macroeconomic policy in 2022 after they take notes from a key economic planning meeting for the country.

China outlines measures to ensure macroeconomic stability in 2022 at the annual Central Economic Work Conference concluded on Friday.

The meeting pointed out that efforts should be made to safeguard macroeconomic stability, keep major economic indicators within an appropriate range and maintain social stability.

China may moderately strengthen its macroeconomic policy in 2022 while emphasizing the coordination and linkage of policies, Zhang Xu, chief analyst for fixed income from Everbright Securities predicted in a note.

The meeting recognized China's economic achievements over the past year but highlighted the "three types of pressure" faced by the Chinese economy, namely declining demand, supply shocks and weakening outlook. 

Macroeconomic policy should break the past models, and become more targeted as the economy endures new downward pressure, said Zhang. 

He noted that these policies must be better coordinated to achieve the maximum effect under the current complex economic situation.

China may set the target for economic growth at 5.5 percent in 2022, said Zhang.

The speed for economic growth requires policy support, he added, while emphasizing that economic expansion is necessary for supporting employment and maintaining a stable set of expectations, he added.

China's consumer price index (CPI), a main gauge of inflation, rose by 2.3 percent year-on-year in November, official data showed. The CPI continues to rise as expected, and the core CPI has fallen, reflecting that demand is still relatively weak, Zhang noted. 

The demand side may determine the CPI movement going forward, he added.

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The notable feature of the recent round of economic policy is that it emphasized the organic combination of cross-cyclical policy (ensure macroeconomic stability) and counter-cyclical policies (structural reforms), noted Zhang Wenlang, chief macro analyst at China International Capital Corporation.

Therefore, coordination between the central and local governments, as well as various departments is required, he added. Fiscal, monetary and industry policies may work together towards the goal of stable growth, he said.

Interest rate tools should play a leading role in monetary policy, said Zhe He, a research fellow at CF40, a think tank.

The benchmark interest rate should be lowered to guide the decline of market interest rates, to reduce the debt pressure of the private sector and expand the level of spontaneous investment and consumption in the market, Zhu added.