China's central conference unveils key economic reforms for growth and stability

Editor's note: Bruce Pang is chief economist and head of research at JLL Greater China. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

In a significant policy announcement, China has reaffirmed its commitment to progress while ensuring stability.

According to the central economic work conference held in Beijing earlier this week, China intends to actively pursue comprehensive reform and open up its economy, boosting economic confidence.

Marking a first in its policy direction, China introduced the concepts of "non-economic policies", "technology policies", and "environmental protection policies". These initiatives represent a holistic approach to national and economic security, calling for a strategic, integrated policy framework that emphasizes coordination, mutual advancement, and ambitious goals to ensure a sustainable recovery in supply and demand.

The government's plan includes bolstering proactive fiscal policies, identified as crucial in stabilizing investment, consumption, and growth, while also mitigating risks. This strategy will involve the effective utilization of policy levers, optimizing fiscal spending, and introducing measures such as special refinancing bonds and targeted tax incentives for select groups. These fiscal policies aim to stimulate economic activity, secure social welfare, and strengthen market confidence.

In a significant shift, the conference highlighted plans to refine monetary policies, making them more precise, robust, and adaptable. This includes a focus on increasing efficiency and aligning these policies more closely with fiscal strategies. Recognizing the potential for a moderate easing of money supply and social financing, the plan also calls for effective liquidity management and credit allocation.

A notable change is the alignment of social financing and money supply with economic growth and price level targets, moving away from the previous emphasis on matching growth rates. This adjustment indicates a more nuanced understanding of the interplay between monetary and credit supply and demand.

The conference also emphasized the importance of advancing high-quality development, focusing on boosting the confidence and initiative of enterprises. This involves supporting key projects and technological reforms and empowering specialized firms to increase investment, enhance R&D efficiency, and expand market reach. Financial support is set to prioritize the private sector and enterprises, with policies aimed at increasing credit growth, improving loan ratios, and enhancing overall financial services to support enterprise growth and vitality.

Overall, China's comprehensive strategy is geared towards balancing and enhancing the expansion and quality of the real economy. The goal is to establish an integrated industrial system that harmonizes the real economy with scientific and technological innovation, modern finance, and human resource development, setting a new paradigm for sustainable economic growth and stability.