Looking at the New Direction of Economic Work in 2025 from the Central Political Bureau Meeting

On December 9, the Political Bureau of the Central Committee of the Communist Party of China held a meeting to analyze and study the economic work for 2025. The meeting summarized and analyzed this year's economic work, providing a comprehensive and objective assessment of the current economic development situation. A series of deployments for next year's economic work were made, which will further strengthen confidence in development, proactively address challenges, and solidify the positive momentum of economic recovery, laying a solid foundation for a good start to the "14th Five-Year Plan."

Major Goals for Economic and Social Development This Year Will Be Successfully Achieved

2024 is a key year for achieving the goals of the "14th Five-Year Plan." Since the beginning of this year, facing a more complex international and domestic environment, the Central Committee of the Communist Party of China, with Comrade Xi Jinping at its core, has united and led the entire party and the people of all ethnic groups in the country to respond calmly and implement comprehensive policies, resulting in overall stable economic operations and steady progress. The meeting recognized that China's economic strength, technological capabilities, and overall national power continue to enhance. New types of productive forces are developing steadily, reforms and opening-up are deepening continuously, risk resolution in key areas is orderly and effective, and livelihood guarantees are solid and powerful. The main goals and tasks for economic and social development this year will be successfully completed.

"The achievements in economic and social development this year are hard-earned under complex and severe circumstances, fully confirming the correctness and foresight of the Central Committee's judgments and decision-making," said Guo Liyan, deputy director of the Economic Research Institute of the China Academy of Macroeconomic Research. The series of important judgments made by the meeting on this year's economic situation will help further strengthen confidence in development and stabilize expectations.

Currently, China faces many uncertainties and challenges in its development. To effectively carry out economic work next year, it is essential to maintain a strong belief in victory.

"Further comprehensively deepen reforms," "expand high-level opening-up," "implement more proactive macro policies," "expand domestic demand," "stabilize the real estate and stock markets"… In response to next year's economic work, the Central Political Bureau meeting made a series of important deployments.

"The series of work deployments made by the meeting uphold the general principle of seeking progress while maintaining stability, with clear direction and pragmatic strength, better coordinating development and security, considering both the present and the long term, and sending a strong signal of unwavering promotion of high-quality development," Guo Liyan stated. It is necessary to enhance the sense of responsibility and urgency in doing economic work and accelerate the effective implementation of a package of incremental policies to continuously consolidate the positive trend of economic recovery and achieve high-quality completion of the "14th Five-Year Plan" goals and tasks.

Implement More Proactive and Effective Macroeconomic Policies

The meeting emphasized the implementation of a more proactive fiscal policy and moderately loose monetary policy, enriching and perfecting the policy toolbox, strengthening extraordinary counter-cyclical adjustments, and implementing a "combination punch" of policies... In terms of macro policy orientation for next year, the meeting sent a clear signal of "more proactive and effective."

"Implementing more proactive and effective macro policies is based on previous successful experiences in macro control and is a scientifically deployed response to domestic and international situations," said Xu Guangjian, a professor at the School of Public Administration of Renmin University of China. In light of next year's complex domestic and foreign situations, the meeting proposed "strengthening extraordinary counter-cyclical adjustments," which will further enhance the forward-looking nature of macro policies and better guide and boost expectations.

The meeting proposed implementing a more proactive fiscal policy. Xu Guangjian believes that next year, fiscal policy will become more proactive to expand total demand with necessary spending efforts and counteract external uncertainties through domestic demand.

The phrase "moderately loose monetary policy" drew attention from the meeting.

"The shift in the wording of monetary policy from 'prudent' to 'moderately loose' indicates that we will continue to maintain a supportive monetary policy stance, ensuring reasonable liquidity and further reducing the financing costs for enterprises and residents, thereby creating a favorable monetary and financial environment for sustained economic recovery," said Wen Bin, chief economist of China Minsheng Bank. This marks the first time in over a decade that China has reiterated "moderately loose" monetary policy. In practice, monetary policy has been flexibly moderate; this year, the market generally feels that it has been slightly loose.

Expand Domestic Demand Across the Board

Tightly linked to economic development and social well-being, domestic demand, composed of consumption and investment, is a key engine of economic growth.

The meeting proposed, "We must vigorously stimulate consumption and improve investment efficiency, expanding domestic demand across the board," reflecting a consistent requirement while further highlighting the clear direction of expanding domestic demand.

Since the beginning of this year, as policies to promote consumption, such as trade-in programs for consumer goods, have taken effect, the demand for consumer goods in China has continued to be released. In October, the total retail sales of consumer goods increased by 4.8% year-on-year, accelerating by 1.6 percentage points from the previous month, marking the highest monthly growth rate since March.

"Currently, we must continue to consolidate the momentum of consumption recovery, promote the rebound of consumption in automobiles and home appliances, and enhance digital, experiential, and cultural tourism consumption to continuously unleash the potential of domestic demand and better meet the people's needs for a better life," said Chen Lifeng, a researcher at the Market Economy Research Institute of the Development Research Center of the State Council.

Investment serves as demand in the short term and supply in the medium to long term. Improving investment efficiency will help better expand domestic demand and benefit people's livelihoods.

"To improve investment efficiency, we must maintain a reasonable level of government investment while further optimizing the investment structure," Xu Guangjian stated. It is crucial to leverage government investment to drive overall social investment and further improve systems and regulations to enhance investment efficiency through refined management.

Shape New Advantages in Industrial Development Through Technological Innovation
The meeting proposed to lead the development of new types of productive forces through technological innovation and to build a modern industrial system.

This year, China’s new types of productive forces have developed steadily, and the industrial structure has continued to optimize: in the first three quarters, the value added of high-tech manufacturing above a designated size increased by 9.1% year-on-year, and investment in high-tech industries grew by 10% year-on-year, with the production of optoelectronic devices and virtual reality equipment maintaining double-digit growth.

Li Wei, a researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, stated that technological innovation is the core element in developing new types of productive forces. The series of deployments from the meeting will further promote the deep implementation of the innovation-driven development strategy, facilitate the integration of the real economy with the digital economy, and foster the growth of new types of productive forces, creating more new growth points, and continuously accelerating the transition from old to new driving forces.

The Third Plenary Session of the 20th Central Committee proposed strengthening the coordination of innovation resources and organizing forces to promote the integration of technological innovation and industrial innovation. This meeting again emphasized the "integration of technological innovation and industrial innovation."

"Technological innovation is the endogenous driving force of industrial innovation, while industrial innovation is the realization of the value of technological innovation. The two mutually promote and advance each other," Li Wei stated. Promoting the deep integration of technological innovation and industrial innovation is a systematic project. On one hand, breakthroughs in key core technologies and the improvement of original innovation capabilities must be achieved; on the other hand, efforts must be made to strengthen the status of enterprises as the main body of technological innovation, streamline the channels for the commercialization of scientific and technological achievements, and vigorously promote the industrialization of scientific and technological results.

Enhance Development's Endogenous Power Through Reform and Opening-Up

The meeting emphasized the message of "further comprehensively deepening reforms and expanding high-level opening-up," sending a strong signal to enhance the endogenous power of development through reform and opening-up.

"The Third Plenary Session of the 20th Central Committee made comprehensive deployments for further deepening reforms, identifying over 300 major reform measures. Accelerating the implementation of these measures is an important part of next year's economic work and will inject strong momentum into the economic and social development of next year," said Dong Yu, executive vice president of the China Development Planning Institute at Tsinghua University.

The meeting proposed leveraging the guiding role of economic system reforms to ensure that landmark reform measures are effectively implemented.

From opinions on accelerating the comprehensive green transformation of economic and social development to opinions on improving market access systems, a series of central-level reform documents are being released in line with the relevant deployments of the Third Plenary Session of the 20th Central Committee. "According to the division of responsibilities for implementing the important reform measures outlined in the 'Decisions' of the Third Plenary Session, several major reform measures will be accelerated for launch next year," Dong Yu said.

Using opening-up to promote reform and development has been a successful practice in China’s reform journey. The meeting proposed to expand high-level opening-up and stabilize foreign trade and investment.

Recently, a series of policy measures have been introduced regarding the reform and innovative development of digital trade and the promotion of stable growth in foreign trade. Dong Yu emphasized the need to enhance services for enterprises, addressing the practical difficulties they face, and seizing new pathways, models, and business formats to further solidify the foundation of foreign trade and investment.

The meeting proposed to strengthen the implementation of regional strategies to enhance regional development vitality. Guo Liyan noted the importance of deeply implementing major regional strategies, steadily advancing the institutional opening-up through the construction of pilot free trade zones, and promoting a new pattern of higher-level reform and opening-up.

Strengthen the Efforts to Guarantee and Improve People's Livelihoods
The ultimate goal of promoting high-quality development is to ensure the happiness and well-being of the people. This meeting pointed out the need to strengthen the guarantees and improvements in people's livelihoods, enhancing their sense of gain, happiness, and security.

"The more complex and severe the economic situation, the more we need to focus on people’s livelihoods and ensure that the bottom line of living standards is secured. Currently, we need to implement more practical measures to strengthen the social security net and create more effective demand by continuously ensuring and improving people's livelihoods, injecting new momentum into the sustained and healthy development of the economy and society," said Long Haibo, a researcher at the Development Research Center of the State Council.

The meeting made important deployments to continue consolidating and expanding the achievements in poverty alleviation, emphasizing the need to "coordinate the promotion of new urbanization and comprehensive rural revitalization, and facilitate urban-rural integration development."

"Implementing the meeting's deployments is crucial for promoting agricultural efficiency, increasing farmers' income, and energizing rural areas, as well as further enhancing the institutional mechanisms for urban-rural integrated development," Long Haibo remarked.

Green mountains and clear waters are natural, economic, and social wealth. The meeting emphasized the need to synergistically promote carbon reduction, pollution control, and green growth, accelerating the comprehensive green transformation of economic and social development. Xu Guangjian stated that the current focus should be on actively cultivating green and low-carbon industries, vigorously developing advanced manufacturing, advocating green and healthy consumption concepts, and accelerating the formation of green production and lifestyle.

In critical times, unity and coordinated efforts are essential. The meeting emphasized the need to strengthen the Party's leadership over economic work, ensuring that the Central Committee's decisions and deployments are effectively implemented.

Experts indicate that under the strong leadership of the Central Committee of the Communist Party of China, with Comrade Xi Jinping at the core, by thoroughly implementing the decisions and deployments, fully mobilizing all parties' enthusiasm, we are fully capable of achieving next year's economic and social development goals and creating a new landscape for development.