A staff member works at a logistic enterprise in Binzhou, east China's Shandong Province, Nov. 11, 2023. [Photo/Xinhua]
Boosting untapped consumption and expanding
As constraints from insufficient domestic demand are still prominent, it is imperative to enhance demand-side management in the coming year and ensure that consumption, investment and exports — the three main drivers of growth in China — play their parts in powering the economy, the Office of the Central Commission for Financial and Economic Affairs said.
Dedicated efforts are needed to leverage the advantages of the country's large market and robust production capacity, the office said in a detailed readout of the annual Central Economic Work Conference held from Dec 11 to 12, during which top leaders set economic targets for the following year.
Stronger steps will be taken to better coordinate consumption and investment, stimulate untapped potential in consumption and expand effective investment to create a virtuous cycle between the two, the office said.
China will promote a shift in domestic consumption from post-COVID recovery to sustained expansion next year.
This will involve actively nurturing new consumption growth areas such as smart homes, recreation as well as tourism and sports, the office said.
It said equipment upgrading and trade-ins for consumer goods will be promoted on a large scale.
Noting that these areas boast significant potential, the office said substantial demand can be unleashed by providing appropriate policy support and guidance.
Bolstering people's incomes and strengthening the social security system will enable greater confidence in their financial well-being, thus boosting their capacity and willingness to spend, said Su Jian, a professor at Peking University's School of Economics.
Moreover, the catalyzing role of government investment will be better brought out, with a special focus on core technological breakthroughs, new types of infrastructure, energy conservation and emission reduction.
Programs to shore up weak links in socioeconomic development, as well as major projects, will be expedited, the office said.
A new mechanism for public-private partnership will be exercised to good effect, in order to support the participation of the private sector in areas including the construction of new types of infrastructure, the office said.
The government is expected to channel investments toward sectors that directly benefit the people, such as elderly care and child care facilities, rural logistics infrastructure and charging stations, to drive sustainable development, said Wen Bin, chief economist at China Minsheng Bank.
Meanwhile, there is a need to strengthen and improve macroeconomic regulation by implementing proactive fiscal policies and prudent monetary policy while strengthening the innovation and coordination of policy tools, the office said.
Efforts will be made to maintain reasonable and sufficient liquidity, and keep the scale of social financing and money supply on a par with expected targets for economic growth and price levels, it said.
By placing the scale of social financing ahead of money supply, the adjustment in the statement indicates a closer relationship between social financing and economic growth, the office said.
In addition, the traditional focus on "nominal economic growth rate "has been replaced with "expected targets for economic growth and price levels", which allows for a more comprehensive consideration of the objectives of economic growth and price stability and emphasizes the importance of price levels as a key target of monetary policy, the office said.
In terms of fiscal policy, it is vital to make good use of fiscal policy space, strengthen financial support for major national strategic tasks, and reasonably expand the scope of local government special bonds for capital purposes, the office said.
Implementing these macroeconomic policies and strengthening the consistency of policy orientation will help expand aggregate demand, effectively upgrade the quality and expand the country's economic output, it said.
