China has once again sent the world a clear signal that it will prioritize bolstering growth and opening up. At the Central Economic Work Conference, an annual meeting where policymakers outline the government's economic agenda for the year to come, a host of pro-growth policies were agreed upon.
Most notably, it was decided that China will adopt a more proactive fiscal policy and a moderately loose monetary policy. In contrast with China's previous monetary policy, which was defined as "prudent," the latest shift will see the central bank attempt to expand the supply of money to boost the economy. The aim is to make money less expensive to borrow and encourage spending. It is the first time China has adjusted its monetary policy in 14 years. A more proactive fiscal policy aims to issue more treasury bonds, widen the fiscal deficit and ramp up government spending in supporting economic growth and increasing people's wellbeing.
Several economic priorities were identified for 2025, with the top one being the expansion of domestic demand. Specific measures include working to increase incomes for middle- and low-income groups, raising pensions and pursuing urban renewal. The government will also promote the development of cultural and tourism industries while encouraging businesses to make the most of opportunities presented by the ice and snow and senior care economies, and the debut of new products, services and stores.
At the meeting, stabilizing foreign trade and investment was reaffirmed as a priority. The government will place an emphasis on supporting services trade, green trade and digital trade. Pilot programs in opening up the telecommunications, healthcare and education sectors will be expanded. This stance reflects China's continued commitment to international engagement, offering hope to a world struggling with protectionism, tariff wars and supply chain disruptions. These economic policies unfold against the backdrop of volatility in the international landscape and prolonged geopolitical conflicts. They are expected to deliver stability in a world full of uncertainties.
China's growth trajectory in 2024 has been uneven but resilient, with a strong start followed by increasing downward pressure around mid-year and a subsequent upswing in the final quarter. Judging from available data, China is on track to meet its full-year growth target of around 5 percent. With this well-conceived to-do list at hand, China, which contributes nearly 30 percent of global economic growth, will be better equipped to forge ahead.
