Chinese leaders pledge to keep up economic recovery

Officials say there will be no policy U-turns in setting economic priorities to pursue stability and sustainability

Senior Chinese leaders have pledged to maintain "necessary support" to keep up China's economic recovery, as the world's second-largest economy continues to face uncertainties and headwinds.

Officials had pointed out that changes due to the Covid-19 pandemic and the external environment had created many uncertainties, and the foundation for China's economic recovery was "not solid", according to a readout released yesterday evening by state news agency Xinhua at the end of a key economic meeting.

"The global economic situation next year will remain complex and severe, the recovery will be unstable and uneven, and various risks caused by the impact of the epidemic cannot be ignored," said the Xinhua communique.

Officials had said during the three-day meeting to set out China's economic priorities for the coming year that Beijing must maintain "continuity, stability and sustainability" in its macro-economic policies, adding that there would be no policy U-turns.

Held at the close of the year, the annual Central Economic Work Conference was attended by top Chinese leaders - including President Xi Jinping and Premier Li Keqiang - as well as officials from the Central Committee of the Chinese Communist Party (CCP) and the State Council.

The closed-door meeting is closely watched by observers for indications on what policy directions China will take moving forward.

The country's economy is expected to grow about 2 per cent this year, the only major economy to register positive growth against the backdrop of the pandemic.

Analysts expect China to post 2021 growth of up to 8 per cent, on the back of this low base.

Next year will be key for China as it marks the 100th anniversary of the CCP, and is also the first year of the country's new five-year development plan.

Other policy priorities laid out by officials include boosting domestic consumption, strengthening the independence of industrial supply chains, and boosting China's strength in strategic technologies.

Taken together, they constitute a broader policy aimed at increasing self-reliance and mitigating the impact from the technological and economic decoupling that Washington has pursued in the last few years, said observers.

Efforts must focus on "solving the major problems that restrict the country's development and security", said Xinhua.

  • 2%

    China's expected economic growth this year. It is the only major economy to register positive growth against the backdrop of the Covid-19 pandemic.

    8%

    What analysts expect the country's growth to be next year.

Mr Xi had put forth a "dual circulation strategy" this year that is meant to reduce China's reliance on external markets. Part of the strategy involves boosting domestic demand and consumption.

"The most fundamental thing about expanding consumption is to promote employment, improve social security, optimise income distribution, expand the middle income group, and solidly promote common prosperity," reported Xinhua yesterday.

Senior Chinese leaders also pledged to strengthen anti-monopoly efforts in the coming year, as Beijing moves to enhance supervision of its large technology companies.

They pointed to the need to "strengthen regulation, enhance supervision capabilities, and resolutely oppose monopoly and unfair competition", said Xinhua.

The communique added that officials agreed "financial innovation must be carried out under the premise of careful supervision".

These comments are the latest indication that Beijing will rein in the influence of its large tech companies, following last month's release of draft regulations targeted at monopolistic practices in the Internet industry.

Last month, regulators also pulled the plug on Ant Group's planned US$37 billion (S$49 billion) initial public offering.

Shanghai-based independent economist Ye Tan said this year's conference showed policymakers were still worried about the uncertainties posed by China's external environment, and stabilising the economy is still the first priority.

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on December 19, 2020, with the headline Chinese leaders pledge to keep up economic recovery. Subscribe