China moves to adjust its economic policies for the year 2025, signaling three positive aspects, said Shi Yinghua, director of the macroeconomic research center of the Chinese Academy of Fiscal Sciences, according to a CCTV news on Wednesday, while elaborating on the meeting held by the Political Bureau of the Communist Party of China (CPC) Central Committee on Dec 9, 2024.
Shi said, first of all, according to the meeting, China's 2024 economic growth target is expected to be achieved, and people have more positive expectations for the current economy.
Second, the wording of the policy in the meeting has released strong positive signals, from which it can be judged that China will implement more proactive macro policies next year, especially fiscal policy and monetary policy.
Third, efforts to promote the reform was once again stressed at the meeting. After the third plenary session of the 20th CPC Central Committee, China has made important arrangements to accelerate the reform, which has played a positive role in boosting market expectations and improving market confidence.
Shi further interpreted "the more proactive fiscal policy" and "the moderately loose monetary policy" proposed at the meeting. She said, on the fiscal side, there is more room for China's government debt ratio compared to major developed and developing economies. From the policy signals of this meeting, it can be seen that China can actively make good use of the deficit space that can be increased in the future, make good use of various policy tools, and give play to the role of fiscal policy in stabilizing economic growth.
In terms of monetary policy, compared with the prudent monetary policy that has been emphasized for more than a decade, the meeting proposed a more active "moderately loose monetary policy". This helps to drive economic growth and expand demand.
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