In a pivotal move to address ongoing economic challenges, the Political Bureau of the Communist Party of China recently adopted a more cautious yet realistic stance on economic policies aimed at sustaining growth in the world's second-largest economy. This decision follows the International Monetary Fund's projection of a 5 percent GDP growth for the Chinese mainland in 2024.
The meeting, held shortly after the Party's third plenary session, emphasized essential reforms to bolster the private sector and restore investor confidence. This strategic shift signifies the government's commitment to rebalancing an economy that has long relied heavily on construction and export manufacturing.
China's national economy is currently under pressure from international markets and experiencing weak domestic demand. In the second quarter, GDP growth slowed to 4.7 percent year-on-year, following a stronger 5.3 percent increase in the first quarter. To counteract these trends, the Political Bureau outlined both short- and medium-term goals focused on expanding domestic demand and boosting household consumption.
Historically, the Chinese mainland has prioritized advanced technology industries such as electric vehicles and renewable energy. While this focus has positioned the country as a leader in high-tech sectors, intense competition among local companies has led to price drops and reduced profits, resulting in numerous business failures.
Recognizing the limitations of an economic model overly dependent on real estate and infrastructure investment, the government is now shifting resources from the public sector to households. This transition aims to mitigate the risks associated with increasing debt and prevent a prolonged period of low growth and potential deflation.
By realigning its economic strategies to prioritize consumer spending and support the private sector, the Chinese mainland seeks to achieve a sustainable growth rate and navigate the complexities of the global economic landscape.
Reference(s):
cgtn.com
