China pledged to maintain stable economic policies next year to sustain growth while forging ahead with reforms as the nation’s leaders wrapped up the annual Central Economic Work Conference in Beijing yesterday.

The government will stick to a proactive fiscal policy and a prudent monetary policy in 2014 to maintain a balance between growth and reform, according to a statement issued after the four-day conference.

“China’s economy is still under downward pressure and the country should keep its policies stable and flexible, paving the way for further reforms,” it said.

“2014 will be the first year that China will implement the decisions of deepening reforms, and we should stick to the principle of seeking advancement amid stability ... through accelerating economic restructuring, promoting innovation and improving people’s livelihoods.”

Reform and innovation will be core areas of next year’s economic work and the country will push forward interest rate liberalization and exchange rate reform, the statement said.

The government will continue to adjust the structure of expenditure, spend money more wisely, improve structural tax cuts and increase the number of experiments for replacing turnover tax with a value-added levy, the statement said.

The country will “keep a reasonable growth of monetary credit, optimize the funding and credit structure and increase the proportion of direct financing,” it said.

China has kept a proactive fiscal policy since late 2008 when the country rolled out a 4 trillion yuan (US$650 billion) stimulus package to combat the adverse impact of the global financial crisis.

The conference, which sets the tone for next year’s macroeconomic policies, broke a record by having meetings over four days. Just two days in the past, the length of this year’s meeting was an indication of the number of items to be discussed and their increasing complexity.

The statement said the government is calling for more efforts on guaranteeing food safety, reducing industrial overcapacity, containing local government debt, enhancing coordination of regional development, improving people’s livelihoods and promoting further opening up.

Local government debt surged during the investment and construction binge that was part and parcel of the 2008 stimulus, Xinhua news agency said.

A huge number of debt-financed projects have not generated any cash since. Local government debt, which the National Audit Office estimates at around 10 trillion yuan (US$1.64 trillion), has become a major threat to financial stability.

The office announced a nationwide audit of government debt in July, but the results have yet to be published.

“China should coordinate short-term measures and a long-term mechanism to defuse the local government debt risks,” said the statement.

It promises to discipline debt-raising procedures for local governments and hold them accountable for their debt, while vowing efforts to correct the GDP-obsession mindset of many officials.

The statement noted that the way to resolve overcapacity is through innovation, as the country continues to see adjustment of industrial structure as one of its core tasks for economic development in 2014.

China should combine the goals of letting the market play a decisive role in allocating resources and letting the government play a better role, and eliminate incompetent players through the means of competition, the statement said.

Although the conference did not reveal a growth target for next year — this will come in March when Premier Li Keqiang delivers the government work report — some analysts said the target for gross domestic product growth may be lowered to 7 percent from the current 7.5 percent.