Commentary: China navigates economic challenges with innovative, synergistic policy strength

By Ma Haoran, Li Laifang (Xinhua) 10:20, March 02, 2024

BEIJING, March 1 (Xinhua) -- As some Western media reports cast a somber shadow on China's economic landscape, there lies a need to delve deeper into the country's strategic responses.

Contrary to their pessimistic narratives, China's economic policy arsenal tells a different story. It is one that is not only ample but also markedly effective.

Naysayers overlook the comprehensive scope and nuanced evolution of China's economic strategies. The Chinese government has demonstrated a commendable level of responsibility and strategic foresight, extending beyond traditional fiscal and monetary policies to include structural reforms, innovation-driven approaches, and global collaboration.

The Central Economic Work Conference in December 2023 emphasized the continuation of proactive fiscal and prudent monetary policies into 2024 while enhancing policy innovation and coordination. The conference highlighted the need for policy consistency and synergistic effects in policy execution, underscoring implementation through "swift and decisive action," "practical efforts" and "bold measures."

The proactive fiscal policy should be strengthened appropriately and its effectiveness should be improved, and the prudent monetary policy should be flexible, moderate, precise and effective, noted a meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee on Thursday.

In 2023, China faced its share of economic hurdles, ranging from subdued demand and industrial overcapacity to complex domestic and international economic environments. Yet, China's response, through a series of calibrated countermeasures and policy adjustments, began to yield results. Significantly, China's GDP soared beyond 126 trillion yuan (17.73 trillion U.S. dollars) in 2023, marking a year-on-year increase of 5.2 percent. This increment, equivalent to the annual economic output of a mid-sized country, underscores the robust momentum of the Chinese economy.

On Feb. 20, the loan prime rate (LPR), a market-based benchmark lending rate, saw its over-five-year rate reduced by 25 basis points to 3.95 percent. The significant decrease -- the largest in recent years -- effectively lowers the cost of corporate financing, improves the credit environment, and is also likely to benefit the further recovery of consumer spending.

Policies to boost consumption are working. Last year, its total retail sales of consumer goods grew by 7.2 percent to reach 47.15 trillion yuan, hitting a record high. Notably, China saw a 20 percent year-on-year increase in service retail sales. Per capita service consumption expenditure surged by 14.4 percent, accounting for 45.2 percent of the total, signaling an optimization of the consumption structure and an elevation in living standards.

China's unwavering commitment to environmental protection and sustainable development has been evident in its vigorous promotion of green energy and low-carbon technologies. The production of key industrial goods like solar cells and new energy vehicles has seen significant increases, reflecting China's strides in green development.

In 2023, China introduced numerous policies to stabilize the real estate market. A total of 276 cities in 31 provincial-level regions across China have established real estate financing coordination mechanisms and about 6,000 property projects have been included on the "white lists" that are eligible for financing support, according to the Ministry of Housing and Urban-Rural Development. Major cities like Shanghai, Guangzhou, and Shenzhen have adapted their housing policies.

Investments in scientific research and innovation, underpinned by advancements in technologies like AI, big data, and 5G, have significantly bolstered China's new productive forces. These efforts lay a solid foundation for the nation's enduring economic development.

This year, China will plan major measures to further reform in all areas and inject strong impetus into promoting high-quality development and advancing Chinese modernization. It is also foreseeable that new measures for this year's economic and social development will be unveiled at the upcoming "Two Sessions," or the annual meetings of China's national legislature and top political advisory body.

Upholding the new development philosophy, China aims to effectively improve the quality of its economy and promote its growth within a reasonable range, placing greater emphasis on the solid, full and down-to-earth implementation of policies and measures.

No doubt, the policies unveiled so far will continue to deliver positive outcomes. And new policies are also expected in line with the evolving economic operation to ensure its upward trajectory unchanged.

(Web editor: Tian Yi, Wu Chaolan)


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