BEIJING, Dec. 24, 2022 /PRNewswire/ — Battered by domestic challenges and disruptive external headwinds, the Chinese economy has coped with a tough 2022 with a GDP growth rate of three percent in the first three quarters.
The annual Central Economic Work Conference was held in Beijing from December 15 to 16 as Chinese leaders decided on the priorities for the economic work in 2023.
Delivering an important speech at the conference, Chinese President Xi Jinping reviewed the country’s economic work in 2022, analyzed the current economic situation and arranged next year’s economic work.
Currently, the foundation of economic recovery is not yet stabilized, and China is still facing three-fold pressure on contracting demand, supply shocks and weak expectations, the meeting pointed out in a statement.
“However, we should see that our economy has strong resilience, great potential and robust vitality,” the meeting noted, calling for firm confidence in economic work and vowing major efforts to ensure high-quality, reasonable growth.
Ensuring stability a priority
The meeting demanded making economic stability a top priority and pursuing steady progress while ensuring economic stability for the next year.
For an economy of China’s size, it is vital to maintain a stable economic performance. Efforts will be made to stabilize growth, employment and prices so that major economic indicators will stay within an appropriate range, the meeting stressed.
The meeting also noted better coordinating epidemic prevention and control with economic and social development, urging efforts to optimize epidemic response based on time and situation, and focus on the elderly and those with underlying diseases.
Mentioning the country has rolled out a policy mix to sustain economic growth earlier this year, Zhang Junwei, a research fellow of the Development Research Center of the State Council, believes the country will devote greater efforts to stabilizing growth, employment and prices.
The meeting further highlighted the determination of the Chinese leaders to regard the issue of restoring economic aggregates balance as the primary task of the current economic operation.
Domestic demand expansion
The country will focus on boosting domestic demand next year by prioritizing the recovery and expansion of consumption, increasing urban and rural personal income through multiple channels and encouraging more private capital to participate in the construction of key national projects, said the meeting.
The potential of the domestic market will also be fully tapped so that domestic demand can play a stronger role in driving economic growth, the meeting said, vowing support for organic demand and upgrading needs on housing as well as support for the private sector and digital economy platforms.
China has released a guideline on expanding domestic demand and fostering a sound domestic demand system to promote its long-term development.
Efforts will be made to facilitate consumption on all fronts and accelerate the upgrading of consumption quality, optimize the investment structure and expand the scope of investment, while promoting the coordinated development of urban and rural areas to release the potential of domestic demand, according to the guideline.
According to the National Bureau of Statistics (NBS), China’s November retail sales sank by 5.9 percent year on year, showing a decline trend in domestic demand.
Cai Tongjuan, a researcher at Chongyang Institute for Financial Studies under Renmin University of China stressed that the construction of a resilient domestic market is very critical. “Without demand, the domestic market is the water without a source.”
In terms of increasing personal income, Cai stressed it is important to avoid talking about consumption in isolation from income. She added residents’ income has declined with their consumption demand in a short after three years of fighting the epidemic, and only by effectively raising residents’ disposable income can consumption be effectively promoted.
High-quality development
The two-day tone-setting conference also emphasized on pursing high-quality development.
Apart from better coordinating epidemic prevention and control with economic and social development, the meeting said stronger coordination should also be achieved. This should happen between qualitative and quantitative growth, between supply-side structural reform and domestic demand expansion, and between economic policies and other policies, the meeting said.
To foster a new development paradigm, the endogenous dynamics and reliability of domestic circulation should be strengthened, while the quality of international circulation should be elevated.
The meeting also stressed the need to handle current work well and at the same time take future development into consideration.
The key to measuring economic development is whether economic growth can bring more absolute and higher quality development, Chen Wenling, chief economist of the China Center for International Economic Exchanges, pointed out.
Wang Jun, director of the China Chief Economists Forum, said the deployment of the Central Economic Work Conference continues to put “quality” in front of “quantity,” which means grasping the quality of the economy is the main direction of the future.