China's journey to deepen reform and open up further accelerated in 2024, marking a significant year for the nation's modernization efforts. The third plenary session of the 20th Central Committee of the Communist Party of China (CPC) set the stage for this new chapter, emphasizing high-quality development and comprehensive reforms.
During his inspection tours this year, Chinese President Xi Jinping highlighted the importance of sweeping reforms. In May, at a symposium in Shandong Province attended by local business and academic leaders, Xi stated, \"Reform is the driving force for development,\" underscoring the need to enhance the socialist system with Chinese characteristics and modernize governance.
Over 300 Measures
The depth and scope of China's reforms in 2024 were encapsulated in a resolution featuring 60 clauses and over 300 measures. Approved in July, these initiatives span economic, political, cultural, and social sectors, as well as national security and defense. Following the plenary session, the implementation of these measures began swiftly. In October, the Ministry of Justice and the National Development and Reform Commission (NDRC) released a draft of the private sector promotion law, aiming to foster the private economy. Additionally, the NDRC introduced special measures to relax market access and guidelines for a unified national market.
Responding to Challenges
Facing a complex international environment and domestic economic adjustments in the first half of 2024, China's government responded with timely macroeconomic policies. These included increasing local government debt quotas, easing real-estate regulations, directing long-term capital into the market, and supporting struggling businesses. In November, lawmakers approved a bill to raise the local government debt ceiling by 6 trillion yuan (about $840 billion), aiming to replace hidden debts with transparent funding. The introduction of special-purpose bonds will provide further debt relief over the next five years. These policies have already shown positive results, with increased consumer demand, a more active stock and real estate market, and improved business expectations in the fourth quarter.
Fostering New Drivers of Foreign Trade
President Xi emphasized the need to attract and stabilize foreign investment during his October tour in Anhui Province. In response to sluggish global trade, China introduced policies to support businesses involved in international trade, nurture new growth areas like e-commerce and green trade, and enhance services with favorable visa policies for business people. China's major trading partners grew from over 140 to more than 150 countries and regions this year. Total goods imports and exports reached 39.79 trillion yuan ($5.6 trillion) in the first 11 months, a 4.9 percent increase year-on-year.
Moreover, China streamlined its negative list for foreign investment, reducing it to 29 items. The manufacturing sector now fully welcomes foreign investors, and market access has expanded in telecommunications, education, culture, and healthcare sectors. Wholly foreign-owned hospitals are permitted in nine cities, and foreign investors can operate fully owned businesses in areas like data centers and online data processing. Additionally, China offers zero-tariff treatment for 100 percent tariff lines to all least developed countries with diplomatic relations.
Reference(s):
China in 2024: Major progress in deepening reform and opening up
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