Agencies
Chinese leaders restated on Thursday their wide-ranging economic policy goals, from modernizing the industrial complex to expanding domestic demand and curbing debt and property sector risks, providing however fewer details of the implementation steps as the widely awaited plenum wrapped up.
The pledges were published in the official news agency Xinhua’s readout of a key meeting of the Communist Party’s Central Committee led by President Xi Jinping, known as a plenum, which takes place roughly every five years.
The report said Beijing wanted to “expand domestic demand, improve social security, health care and income distribution systems and introduce land reforms” – promises that have been made in other official documents in the past decade. But few new policies were announced as the meeting wrapped up Thursday.
The release did not say what changes Beijing intends to implement but said the “tasks” should be completed by 2029. A document with more detailed policy plans is expected to be published in the coming days.
Analysts said that the plenum outcome pointed to continuity, rather than any shifts in policymaking or the economic growth model China pursues.
“There is no clear signal of change in macro policies,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.
Previewed by state media as “epoch-making,” the plenum took place at a time of financial hardship for an increasing number of Chinese at home and of heightened adversity against the country’s industrial policies abroad.
Gary Ng, a senior economist at Natixis, said the readout offered “nothing out of expectation as it just confirms existing policies.” The world’s second-largest economy grew at a slower-than-expected pace in the second quarter, leaning hard on industrial output and external demand, while the crisis-hit property sector and household consumption continued to disappoint.
China pledged to resolve the deepening imbalance between high investment and output levels and tepid demand more than a decade ago at a similar plenum. However, rather than directing resources toward consumers, it poured money into infrastructure and real estate, accumulating debt at an unsustainable pace.
Thursday’s communique reiterated China wanted to “actively expand domestic demand,” without giving details.
“There still appears to be a tension between policies aimed at boosting economic security and expanding the supply-side of the economy, and those aimed at giving market forces a greater role and rebalancing growth toward consumption,” said Julian Evans-Pritchard, head of China economics at Capital Economics.
But Hoo Tiang Boon at Nanyang Technological University in Singapore told Agence France-Presse (AFP) the statement “acknowledges certain risks and obstacles to the Chinese economy.” “It’s a sign that Beijing recognizes the problems, but I’m not sure if they know what are the effective measures to address them,” he said.
The Third Plenum has for decades been an occasion for the party’s top leadership to unveil major economic policy shifts.
In 1978, then-leader Deng Xiaoping used the meeting to announce market reforms that would put China on the path to dazzling economic growth by opening it to the world.
And more recently following the closed-door meeting in 2013, the leadership pledged to give the free market a “decisive” role in resource allocation, as well as other sweeping changes to economic and social policy.
Echoing past plena, top officials promised Thursday to “give fuller play to the role of market mechanisms.” But they also said they would “make up for market failures” and “smooth the circulation of the national economy.”
Lynn Song, ING’s chief economist for Greater China, told AFP the readout offered some “positive signals.” But, he said, the meeting was “not a platform for pushing specific new stimulus measures.” “Those who were looking for new signals on the property market will likely be disappointed,” Song said.
“While real estate was mentioned as one of the three key risks China prioritizes resolving, there was no further mention of expanding affordable housing nor further specifics on efforts to stabilize the property market,” he pointed out.
The meeting comes just days after China posted official statistics showing the economy grew by just 4.7%. in the second quarter. It represented the slowest rate of expansion since early 2023 when China was emerging from a crippling zero-COVID policy that strangled growth.
Analysts polled by Bloomberg had expected 5.1%.
Beijing has said it is aiming for 5% growth this year – enviable for many Western countries but a far cry from the double-digit expansion that for years drove the Chinese economy.
