Text丨 Wen Bin, Wang Jingwen.
The Political Bureau of the Communist Party of China held a meeting on December 8 to analyze and study the economic work in 2024. The main task of this meeting is to set the tone for the subsequent economic work conference.
Specifically, there are the following nine new trends worth paying attention to at this meeting:
First, the general tone: seek progress in stability, promote stability with progress, and establish first and then break
Under the general tone of "seeking progress while maintaining stability", new requirements of "promoting stability through progress" and "establishing first and then breaking through" have been put forward.
The so-called "promoting stability through progress" means implementing the report of the 20th National Congress of the Communist Party of China that "development is the first priority for the Party to govern and rejuvenate the country", and maintain stability through development.
The so-called "first establish and then break" is to do a good job of connecting and switching between the old and new models. The establishment and breaking here, including but not limited to the new model of real estate development, energy structure and debt management mechanism, etc., will continue to operate until the new mechanism is formally formed.
When the leader participated in the deliberations of the Inner Mongolia delegation during the two sessions last year, he said, "You can't throw away the guy who eats in your hand first, and as a result, the new guy who eats has not yet got it, this is not good", which can be regarded as an image expression of "standing first and then breaking".
2. Policy: Strengthen counter-cyclical and cross-cyclical adjustment
The meeting proposed to "increase the intensity of macroeconomic regulation and control", which is consistent with the 7.24 Politburo meeting "to increase the intensity of macroeconomic policy regulation and control", and requires "strengthening counter-cyclical and cross-cyclical adjustment", which is consistent with the ** financial work conference "paying more attention to cross-cyclical and counter-cyclical adjustment".
Compared with the "counter-cyclical adjustment" that mainly focuses on ironing out short-term economic fluctuations, the "cross-cyclical adjustment" obviously has more long-term and comprehensive considerations, which need to take into account multiple economic cycles, mainly focus on the long-term healthy operation and stable growth of the economy, and strive to resolve long-term problems such as industrial structure adjustment, population aging, and systemic risks, so it will inevitably involve the correlation and cooperation between various policy tools.
Therefore, this meeting also emphasized that "it is necessary to enhance the consistency of macroeconomic policy orientation, strengthen economic propaganda and guidance".
3. Fiscal policy: moderate strengthening, quality and efficiency
The meeting demanded that "the active fiscal policy should be moderately strengthened, and the quality and efficiency should be improved." "Moderate strengthening" means that the policy will be moderately strengthened, and "improving quality and efficiency" indicates that the policy will pay more attention to quality and effect.
Historically, "improving quality and efficiency" has been the keynote of fiscal policy in 2021 ("improving quality and efficiency, making it more sustainable"), and the deficit ratio for that year has increased from the previous year's "3.".6% or more" to 32%, and the scale of new special bonds will be increased from 375 trillion down to 365 trillion, the strength has a relatively obvious contraction.
Judging from the statements made at this meeting, we do not believe that it is appropriate to expect too much for next year's fiscal policy. The final 3 of the yearOf the 8% deficit ratio, at least 04 percentage points is for next year, so the deficit rate is expected to be 3 next year0-3.5%. In addition, in order to control debt risks, it is expected that the scale of special bond issuance will be relatively stable, and we will continue to promote the work of debt conversion and strive to revitalize existing assets.
4. Monetary policy: flexible, moderate, precise and effective
The meeting proposed that "a prudent monetary policy should be flexible, moderate, precise and effective". "Flexible" has appeared more than once in history, such as "more flexible and moderate" in 2020 and "flexible and moderate" in 2022. In these two years, there have been successive interest rate cuts and RRR cuts, and the policy tone is stable and loose.
Considering that the Fed may turn to interest rate cuts in the middle of next year, the risk-free interest rate differential between China and the United States will narrow, coupled with the little imported inflationary pressure and the overall moderate price price, the constraints on monetary policy easing will be greatly weakened, and policies such as RRR and interest rate cuts will be implemented in a timely manner as needed.
"Precise and effective" means that monetary policy will continue to increase support for major strategies, key areas and weak links such as scientific and technological innovation, advanced manufacturing, green development and small and medium-sized enterprises.
5. Supply side: lead the construction of a modern industrial system with scientific and technological innovation
It should be noted that the meeting put the industrial policy before the policy to promote domestic demand, and compared with the July 24 Politburo meeting, the position between the two reversed again, which may reflect that the top management attaches more importance to the resilience and safety of the industry.
The meeting called for "leading the construction of a modern industrial system with scientific and technological innovation, and improving the resilience and safety level of the industrial chain". The Politburo meeting in December last year proposed "to accelerate the construction of a modern industrial system and improve the resilience and safety level of the industrial chain", showing that the top management pays more attention to the leading role of scientific and technological innovation.
6. Demand side: form a virtuous circle in which consumption and investment promote each other
The meeting proposed that "efforts should be made to expand domestic demand and form a virtuous circle in which consumption and investment promote each other," and last year's meeting proposed that "efforts should be made to expand domestic demand and give full play to the basic role of consumption and the key role of investment."
From the perspective of domestic economic operation this year, it is mainly manifested in structural recovery, that is, the growth of service consumption is relatively fast, but the growth of commodity consumption is slow;High-tech investment grew rapidly, while investment in infrastructure and real estate development grew slowlyInvestment in state-owned enterprises increased rapidly, while private investment grew slowly. This imbalance in development has made the economic cycle not smooth enough, the oversupply has gradually become prominent, and prices are facing greater pressure.
From the perspective of promoting a virtuous cycle, it is expected that next year it is possible to exert efforts on the consumption side, through the reform of the income distribution system, the improvement of the social security system, the promotion of employment and income improvement, etc., to release the consumption capacity of residents, and achieve a virtuous cycle of matching supply and demand.
7. Reform and opening up: Deepen reforms in key areas and expand high-level opening-up
In terms of reform, the meeting proposed to "deepen the reform of key areas and continue to inject strong impetus into high-quality development", and the reform of key areas here includes but is not limited to the reform of factor marketization, the reform of state-owned assets and state-owned enterprises, the reform of finance, and the reform of the fiscal and taxation system.
In terms of opening up, the meeting proposed that "it is necessary to expand high-level opening up to the outside world and consolidate the basic market of foreign trade and foreign investment". Recently, the "Overall Plan for Comprehensively Connecting with International High-standard Economic and Trade Rules and Promoting the High-level Institutional Opening-up of the China (Shanghai) Pilot Zone" was issued, and the "Work Plan for Supporting Beijing to Deepen the Construction of a Comprehensive Demonstration Zone for the Expansion and Opening-up of the National Service Industry" was approved, showing that the high-level opening-up is continuing to advance.
8. Risk mitigation: Continue to effectively resolve risks in key areas
The meeting proposed that "it is necessary to continue to effectively prevent and resolve risks in key areas, and resolutely adhere to the bottom line of no systemic risks". Compared with the expression of "effectively preventing and resolving major economic and financial risks" at last year's meeting, the first is to emphasize "continuity", and the other is to emphasize "key areas".
Regarding the risks in key areas, the financial work conference has been fully deployed, including local debt risk, real estate risk and small and medium-sized financial institution risk, etc., and it is expected that there will be corresponding arrangements in the subsequent economic work conference.
9. Social work: Do a good job in three aspects
The meeting mentioned three aspects of social work, namely, "we must make unremitting efforts to do a good job in the 'three rural' work, promote urban-rural integration and regional coordinated development", "we must further promote the construction of ecological civilization and green and low-carbon development, and accelerate the construction of a beautiful China", "we must insist on doing our best and doing what we can, and effectively protect and improve people's livelihood".
It is worth noting that these tasks were not mentioned at last year's meeting, reflecting the importance that the top level attaches to issues such as urban and rural, regional, green, and people's livelihood, with the aim of "improving people's livelihood and well-being and maintaining social stability".