Grasping the Underlying Trend and Strengthening Confidence to Drive a Sustained Economic Recovery

The Central Economic Work Conference was held in Beijing on December 11 and 12, 2024. At the meeting, President Xi Jinping delivered an important speech in which he reviewed economic work for 2024, analyzed the current economic situation, and set out plans for economic work in 2025. By providing a comprehensive and objective assessment of the economic landscape, setting clear policy guidelines, and laying out robust plans and measures, the conference has clearly demonstrated to both domestic and international audiences China’s determination to drive a sustained economic recovery.

Over the past year, faced with a complicated and severe environment marked by increasing external pressures and growing internal difficulties, the CPC Central Committee with Xi Jinping at its core has united and led the entire Party and Chinese people in responding to the situation with composure and implementing comprehensive measures. As a result, the economy has enjoyed overall stability and secured steady growth. Solid headway has been made in promoting high-quality development, and the main targets and tasks for economic and social development are expected to be successfully completed. We have made steady progress in developing new quality productive forces, further deepened reform and opening up, effectively defused risks in key areas in an orderly manner, and safeguarded people’s wellbeing with substantive and vigorous steps. All this has ensured new solid strides in advancing Chinese modernization. In terms of quantity, the economy has expanded in every quarter, with quarterly growth rates remaining close to projected targets. Indeed, in the first three quarters, China was one of the fastest-growing major economies in the world. In qualitative terms, during the first three quarters, growth in both high-tech industry investment and the value added of high-tech manufacturing significantly outpaced overall growth for each respective indicator; output for integrated circuits, alternative energy vehicles, and solar cells continued to grow in the double digits; China moved up to the 11th place in the Global Innovation Index and led with the most clusters in the top 100 of the Science and Technology Cluster ranking. In terms of development momentum, since October, there has been a marked rebound in all major economic indicators. We have seen a steady accumulation of positive factors, a consistent improvement in social expectations, and steady growth in market confidence.

The year 2024 marked an extraordinary chapter in China’s economic development, with encouraging achievements that were particularly hard-won. We owe these achievements to the persistent hard work of the whole Party and all the Chinese people under the leadership of the CPC Central Committee led by Xi Jinping. Over the past year, President Xi has made a series of major judgments, set forth important requirements, and drawn up a host of key measures. At crucial moments and key junctures, he has set the direction and steered China’s economic ship forward through the waves. Playing a key role in the planning, deployment, and advancement of a series of major reform measures, he has personally helped deepen economic reform on all fronts, providing a powerful boost of momentum for economic and social development. Through in-depth local inspection tours and careful guidance of development practices, he has promoted faithful implementation of the CPC Central Committee’s policies and measures by all regions and government departments to make sure that the economic and social development goals for the year are achieved. He has also chaired a number of important meetings to assess development trends and put together timely policy packages. Most notably, the package of incremental policies unveiled by the Political Bureau of the Central Committee at its September 26 meeting has helped effectively boost social confidence and drive a notable economic upturn.

Consciously exploring, mastering, and applying objective laws is a vital prerequisite for building confidence, seizing the initiative, and achieving success in a complex and changing environment. Since the 18th CPC National Congress in 2012, the Central Committee under the leadership of Xi Jinping has put forward a series of new philosophies, new thinking, and new strategies concerning the question of how to uphold and develop the socialist economy with Chinese characteristics in the new era and deliver development that is higher in quality, more efficient, fairer, more sustainable, and more secure. In practice, these efforts have led to the formation and development of Xi Jinping’s thought on the economy, which reflects the CPC’s deepened understanding of the laws underlying economic development, especially socialist economic development, and its enhanced ability to apply these laws. In carrying out new practices, the CPC has also gained a deeper understanding of the laws underlying its economic work. The centralized and unified leadership of the CPC Central Committee stands as the fundamental guarantee for successfully carrying out this work. At critical moments and junctures, the CPC Central Committee has promptly assessed the situation and made decisions and plans to ensure that China’s economy braves the headwinds and waves to keep sailing steadily forward. Looking to the future, we must work on coordinating the relationship between an efficient market and a well-functioning government to create an economic order that is both dynamic and well-regulated. The relationship between aggregate supply and demand must be properly managed to ensure smooth flows in the national economy. It is necessary to coordinate the relationship between fostering new growth drivers and upgrading old ones, and to promote the development of new quality productive forces in light of local conditions. It is imperative to coordinate the relationship between efforts to add new resources of high quality and make best use of existing resources, and to improve the efficiency of resource allocation across the board. The relationship between enhancing quality and expanding total output must also be well-coordinated to lay a solid material foundation for Chinese modernization.

The adverse impacts arising from changes in the external environment have undeniably intensified, and China’s economy still faces many difficulties and challenges, primarily insufficient domestic demand, operational difficulties among some enterprises, pressure on employment and income growth, along with many hidden risks. At the same time, it should be recognized that China’s economy enjoys a stable foundation, numerous advantages, strong resilience, and tremendous potential. The fundamental trend of long-term economic growth and the conditions supporting it remain unchanged. China possesses several distinct advantages, including the strengths of its socialist market economy system, a vast market to drive demand, a complete industrial system for ensuring supply, and a vast and high-caliber force of workers and entrepreneurs. The inflation rate, fiscal deficit ratio, and government debt ratio all remain relatively low, leaving an ample reserve of policy tools at our disposal. In addition, the major reform measures unveiled at the third plenary session of the 20th CPC Central Committee which was held in July 2024 have continued to provide strong impetus for steady economic operations. In short, looking at China’s development through a comprehensive, dialectical, and long-term lens, it is clear that the trends and logic underpinning China’s long-term growth remain fundamentally unaltered by the short-term economic fluctuations and complex and changing environment.

To ensure successful performance of the economy in 2025, we must fully grasp the overall requirements set forth at the Central Economic Work Conference, which are as follows: We must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, adhere to the general principle of pursuing progress while maintaining stability, and fully and faithfully implement the new development philosophy. We must move faster to create a new development dynamic, make solid efforts to promote high-quality development, further comprehensive reform, expand high-standard opening up, build a modern industrial system, and better coordinate development and security. We must implement more proactive and impactful macro policies, expand domestic demand, promote integrated sci-tech and industrial innovation, ensure stability in the real estate and stock markets, and prevent and resolve risks in key areas as well as external shocks. We must stabilize expectations and stimulate vitality, promote sustained economic recovery, make ongoing efforts to raise living standards, and maintain social harmony and stability. We must complete the goals and tasks for the 14th Five-Year Plan (2021–2025) to a high standard and lay the foundations needed to ensure a good start to the 15th Five-Year Plan (2026–2030).

To ensure the success of economic work in 2025, we must also fully implement the policy orientation put forward at the Central Economic Work Conference. We should maintain a steady pace of growth, keep employment and prices generally stable, ensure a basic equilibrium in the balance of payments, and see that personal income rises in step with economic growth. We should continue to pursue growth while ensuring stability, promote stability through progress, uphold fundamental principles and break new ground, and introduce new policies before abolishing the old. We must pay attention to boosting integration and coordination, enrich and refine the policy toolkit, and make macro regulation more forward-looking, targeted, and effective. We should adopt a more proactive fiscal policy, implement an appropriately accommodative monetary policy, and strengthen coordination between fiscal, monetary, employment, industrial, regional, trade, environmental, and regulatory policies as well as initiatives for reform and opening up. Efforts must be made to ensure policy synergy and increase the overall effectiveness of policies.

In carrying out economic work in 2025, we should focus on accomplishing major tasks in key areas. Efforts should be made to vigorously boost consumption, improve investment efficiency, and expand domestic demand. We should drive the development of new quality productive forces through scientific and technological innovation and build a modern industrial system. We should leverage the leading role of economic reform by ensuring that landmark reform measures are fully implemented and deliver meaningful results. We need to expand high-standard opening up while keeping foreign trade and foreign investment stable. We must effectively prevent and defuse risks in key areas to ensure that no systemic risks occur. Efforts should be made to pursue coordinated progress in new urbanization and all-around rural revitalization and promote integrated urban-rural development. Steps should be taken to strengthen the implementation of regional strategies and boost regional development vitality. We must work to cut carbon emissions, reduce pollution, pursue green development, and boost economic growth in a concerted manner, and strive to ramp up the transformation to a green model of economic and social development. Finally, we need to ensure and improve people’s wellbeing and give people a stronger sense of fulfillment, happiness, and security. 

In carrying out economic work in 2025, the CPC Central Committee’s sound assessment of the situation should be used to achieve unity in thinking, will, and action, ensuring all involved grasp the overall trend and reinforce confidence while also facing up to difficulties and remaining clear-headed. We should take a target-oriented approach and achieve an optimal mix of stable growth, stable employment, and a reasonable rebound in prices. We need to ensure a sound policy orientation and carefully deter-mine the timing and scale of implementation; measures should be carried out in a prompt and effective manner with a sufficient degree of intensity. A more systemic approach should be adopted to ensure coordination between various policies and reform and opening up measures so that together they deliver greater outcomes. In response to the prominent problem of insufficient demand, we need to boost domestic demand, especially consumer spending. In view of the deep-seated obstacles and external challenges hindering development, we must work unswervingly to deepen reform and expand opening up. To resolve the bottlenecks in industrial transformation and upgrading, we must promote the continued replacement of old growth drivers with new ones. To address the concerns and demands of enterprises regarding their operations, stronger policy support should be provided, and regulation and services should be optimized. Persistent efforts should also be made to address risks and hidden dangers in key areas. It is important to improve the effectiveness of policy implementation; fully mobilize initiative and creativity at the community level; and keep improving the business environment, in order to better pool efforts to promote high-quality development.

(Originally appeared in Qiushi Journal, Chinese edition, No. 24, 2024)