During the Central Economic Work Conference held in Beijing, China's economic priorities for 2025 were unveiled, highlighting the adoption of a more proactive fiscal policy and a moderately accommodative monetary policy. These strategies aim to expand domestic demand comprehensively and sustain the nation's economic growth.
A \"more proactive\" fiscal policy entails increasing the deficit-to-GDP ratio, providing additional funds to boost consumption and investment. Yang Zhiyong, head of the Chinese Academy of Fiscal Sciences, emphasized that leveraging China's fiscal policy space more effectively will support stronger economic growth by expanding domestic demand.
\"To be more proactive means to make full use of the favorable and positive factor of China's fiscal policy space,\" Yang told China Media Group (CMG). He further highlighted that raising the ceiling on local government special-purpose bonds will enhance local governments' financial resources, securing basic livelihoods and operational stability at the grassroots level.
On the monetary front, the conference advocated for a moderately accommodative approach. This includes reductions in the reserve requirement ratio and interest rates at appropriate times to ensure ample liquidity in the economy. Luo Zhiheng, chief economist at Yuekai Securities, noted that implementing a package of fiscal policies in advance is expected to stimulate aggregate demand.
Experts agree that these policy adjustments signal continuity and stability in fiscal measures, building on this year's proactive approach. The coordinated efforts across fiscal, monetary, employment, industrial, regional, trade, environmental, and regulatory policies are designed to align with China's ongoing reform and opening-up initiatives.
Reference(s):
cgtn.com
