The Central Economic Work Conference, the annual gathering of China's top economic policymakers, was held on December 11 and 12.
The conference readout put forward:
- a review of this year's economic policy work;
- a future assessment of the Chinese economy;
- five principles for economic policymaking;
- the broad economic policy direction for 2024; and
- nine areas of focus for next year's policy.
The biggest takeaway from me is the political language used to signal that the Party leadership sees the economy as the overriding priority.
Here are the two most notable instances - in two out of five principles of economic policymaking outlined by the conference:
We must adhere to high-quality development as the overriding priority
We must take advancing with Chinese-style modernisation as the most important political task
There is no real adequate translation for the term "硬道理". The closest is "absolute truth" or "overriding priority".
"发展才是硬道理" ("development is the overriding priority") along with "不管黑猫白猫，能捉到老鼠就是好猫" ("it doesn’t matter if the cat is black or white, it’s a good cat if it can catch mice") are terms emblematic of Deng's economic and political philosophy.
最大的政治 literally means "the biggest politics". In the Party's discourse, it is usually associated with the hearts and minds of the people in "民心是最大的政治" ("the greatest political task is to win the hearts and minds of the people").
In this case, the term is associated with 中国式现代化 "Chinese-style modernisation" (or the "Chinese path to modernisation"), a concept put forward at the 20th Party Congress in October 2022 to describe China's supposedly unique national conditions and choice of development path.
The use of political language such as these are to emphasis what we already know, that the Party really cares about the economy. But how that translates into the policy is another discussion altogether.
Below is a summary of the main policy statements
- In 2023, China's economic recovery has gathered speed and concrete progress has been made on high-quality development. Solid steps have been made towards building a modern socialist country in all respects.
- The Chinese economy faces challenges, including the lack of effective demand, overcapacity in some sectors, weak economic expectations, and a complex and uncertain international environment.
- The favourable conditions facing China's development are stronger than the unfavourable factors, and the basic trend of economic recovery and long-term improvement has not changed.
Economic policymaking principles: the "Five Musts"
- We must adhere to high-quality development as the overriding priority.
- We must persist with deepening supply-side structural reform and focusing on expanding effective demand.
- We must rely on reform and opening up to enhance the drivers for development.
- We must ensure healthy interaction between high-quality development and high-level security.
- We must take advancing with Chinese-style modernisation as the most important political task.
Economic policy direction
- In 2024, economic policy should "pursue progress while maintaining stability, reinforce stability through progress, and stand the economy upright before making breakthroughs" (稳中求进、以进促稳、先立后破)
- More policies shall be introduced to stabilise expectations, growth and employment and to facilitate the transition of China's economic model.
- The current proactive fiscal policy shall be moderately intensified with improved efficiency in fiscal expenditure.
- A prudent monetary policy shall be flexible, moderate, precise and effective, including maintaining ample liquidity.
- Macroeconomic policy directions shall be more consistent with better coordination across policy domains.
- It is critical to improve public opinion guidance to promote a positive narrative of China's economy.
2024 areas of policy focus