China Emphasizes Economic Stability in Plans for Next Year
China stressed that it will aim to keep the economy growing in a stable manner next year as it looks to counteract the effects of a housing market slump and slower growth.
The Communist Party’s annual Central Economic Work Conference pledged to ensure the housing market better meets “reasonable” household demand, according to a state television report Friday. It also said it will keep monetary policy flexible and appropriate and will ensure fiscal policy is effective, targeted and sustainable.
Led by the Politburo Standing Committee, the party’s top decision makers, the economic conference is a precursor to next year’s parliamentary meeting, where detailed targets are disclosed. Analysts are watching closely for clues of further monetary and fiscal stimulus and whether regulations on debt and the property market will be relaxed to help support a slowing economy.
Other highlights from the conference, according to state television:
- Officials pledged to properly advance infrastructure investment
- China will enhance effective regulation of capital
- It will support development of private sector
- Reiterates that houses are for living in, not for speculation
- Common prosperity to be achieved in a stable manner, is a long term process
After focusing policy most of this year on curbing financial risks and reducing debt in the economy, Beijing is starting to shift its focus to supporting growth. The elite Politburo leaders earlier this month signaled a dovish tilt in property policies, while the central bank has also raised expectations of further monetary easing with its decision to cut the reserve requirement ratio for banks.
The economy has slowed in recent months because of a worsening property market slump, weak consumption growth, and repeated outbreaks of Covid-19, which have damaged businesses and consumers’ confidence. Economists forecast growth to slow to 3.1% in the current quarter, a sharp deceleration from 7.9% in the April-June period and 4.9% in the last quarter.
An official target for gross domestic product growth next year will only be revealed at the annual parliament meeting in March 2022. Economists expect authorities to do more to ensure growth will reach around 5%, which would help China achieve its goal of doubling the size of the economy by 2035.
Source: BNN Bloomberg