China "Strengthening Macro Control and Expanding Domestic Demand Next Year... Deepening Supply Reform"

Party Central Politburo Meeting Presided Over by Xi Jinping

On the 8th, the Communist Party of China announced its policy to actively implement macroeconomic regulation, expand domestic demand, and reform the structural supply sector to promote economic recovery next year.

According to the state-run Xinhua News Agency, the Communist Party of China held a meeting of the Central Political Bureau chaired by General Secretary (President) Xi Jinping on the same day to analyze and study the "2024 Economic Work" and to discuss the direction of the Party's anti-corruption efforts for the coming year.

The Central Political Bureau stated, "To successfully carry out economic work next year, we must adhere to the general principle of 'seeking progress while maintaining stability' (穩中求進), accelerate the establishment of a new development pattern, strive for high-quality development, comprehensively deepen reform and opening-up, and promote a high level of scientific and technological self-reliance and strength."

It added, "We must increase the intensity of macroeconomic regulation and control, deepen the expansion of domestic demand and structural reform of the supply sector, integrate new urbanization and rural revitalization, high-quality development, and a high level of security," and "strengthen the actual enhancement of economic vitality, prevent and resolve risks, and improve social expectations (psychology) to reinforce the economic recovery and improvement trend."

The Central Political Bureau specifically stated, "Next year, we will strengthen counter-cyclical adjustment (逆周期調節) and cross-cyclical adjustment (跨周期調節) of macro policies, and continue proactive fiscal policies and moderately accommodative monetary policies."

Counter-cyclical adjustment is a macroeconomic policy aimed at reducing economic cycle volatility by providing swift government support such as interest rate cuts when the economy faces downward pressure, and cooling down overheating during upswings. Large-scale quantitative easing for economic stimulus is excluded. Cross-cyclical adjustment is a concept that adds long-term economic planning to counter-cyclical adjustment, targeting precise interventions such as industrial regulations.

The Central Political Bureau said, "Proactive fiscal policy should be appropriately powerful and effective," and "moderately accommodative monetary policy should be agile, appropriate, precise, and effective."

Furthermore, it clarified guidelines to "enhance the consistency of macro policy direction, strengthen economic propaganda and public opinion guidance, improve the strength and safety level of industries and supply chains," and "create a virtuous cycle where domestic demand expansion, consumption, and investment mutually promote each other, while expanding the level of opening-up to the outside world."

Chinese President Xi Jinping. [Photo by Xinhua News Agency] [Image source=Yonhap News]

The economic policy tone for China next year is expected to be finalized at the Central Economic Work Conference to be held at the end of this month based on the discussions held on this day.

The Central Political Bureau also instructed to pay attention to people's livelihood by ensuring the supply of daily necessities and price stability during Yuan Dan (元旦, January 1st in the Gregorian calendar) and Chun Jie (春節, Lunar New Year on the first day of the lunar calendar), and to ensure that migrant workers receive their wages on time and in full amounts.

Prior to the meeting, President Xi chaired a meeting of the Standing Committee of the Central Political Bureau and received work reports from the Central Commission for Discipline Inspection and the National Supervisory Commission, which are responsible for inspection and anti-corruption campaigns. The Central Political Bureau reviewed the "Regulations on Party Disciplinary Actions" and reaffirmed the policy to strengthen and accelerate the Party's anti-corruption campaign.

The Central Political Bureau emphasized, as reported by Xinhua News Agency, "We must make political discipline and political rules stricter and clearer, increase the intensity of publicity and education on disciplinary regulations, so that Party members and cadres learn and abide by them."