Brief #146: April Politburo Meeting: Economic Policy
On April 28, the Politburo convened a meeting to review the economic situation and policy.
The December meeting sets the direction for the subsequent Central Economic Work Conference, which confirms the economic policy priorities for the following year. The April and July meetings typically review the economic situation and policy direction, making adjustments as necessary.
Assessment of the Economic Situation
At the current Politburo meeting, the Party leadership noted that China’s economy and society had resumed normal operations since the beginning of 2023 after the disruptions caused by COVID-19. The Politburo stated that economic activities have picked up momentum, with the “triple pressure” of shrinking demand, supply shocks, and weakening expectations easing. As a result, "economic growth has been better than expected".
But, the Politburo cautioned that:
the upturn in China's economic performance is mainly due to recovery, with insufficient endogenous momentum and demand. Economic transformation and upgrading faces new obstacles, and there are still many difficulties and challenges to be overcome in promoting high-quality development.
The general economic policy orientation seems to have not changed since the Central Economic Work Conference in December:
Adhere to the general principle of pursuing progress while ensuring stability; fully, accurately, and comprehensively implement the new development concept; accelerate the construction of a new development pattern; comprehensively deepen reform and opening up.
However, there are some new languages on the policy setting:
[we must] combine the effectiveness of policies with the vitality of market entities, form a strong driving force for promoting high-quality development, coordinate efforts to continuously improve economic performance, enhance endogenous growth potential, improve social expectations, and continuously resolve risks and hidden dangers. [We must] seize the opportunity to promote the economy to achieve an effective improvement in quality and reasonable increase in quantity.
Economic Policy Priorities
The Politburo listed six economic policy priorities:
1. Accelerate the construction of a modern industrial system based on the real economy, including by building comparative advantages, technological self-reliance and new industries such as electric vehicles and AI.
2. Restore and expand demand as the key to sustained economic growth, including through active fiscal policy, prudent monetary policy, efforts to increase income and promote service consumption, and policy incentives to stimulate private investment.