Confidence in vital market entities to inject vitality into Chinese economy
The Central Economic Work Conference, which has set the tone for economic policymaking in 2024, called for high-level opening-up, consolidating the overall performance of foreign trade and foreign investment, and further promoting the development of the private sector, according to a readout of the key conference following its conclusion on Tuesday.
Chinese analysts said the wordings in the readout signaled further support to the private sector and foreign companies in China, which are crucial players in beefing up the vitality of the world’s second-largest economy amid lingering global downside risks.
The key meeting, which was held from Monday to Tuesday, urged efforts to effectively strengthen the vitality of the economy, prevent and mitigate risks, improve social expectations, consolidate and enhance the momentum of economic recovery, and effectively upgrade and appropriately expand China’s economy.
Chinese top policymakers have signaled more forceful measures to provide wider access in telecommunications and medical sectors, meet high-standard international trade and economic norms, further improve the country’s business environment, promote growth and beef up expectations in 2024, which would boost confidence and defy Chinese economy doomsayers, the economists noted.
Though the readout did not provide any specific targets, signals sent by the key meeting were closely watched by global markets for any clues on China’s economic agenda for 2024.
“While the medium- and long-term prospects of the Chinese economy remain unchanged and positive, we have encountered some short-term shocks from the pandemic. In this regard, the key meeting, which basically gave a clear response to all the market’s concerns, serves as a confidence booster and forms a relatively clear policy outlook,” Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Tuesday.
The meeting’s stated support for private enterprises will “have a very good effect” on boosting confidence in 2024 with clear expectations, Hu said.
UK businesses are seeing the Central Economic Work Conference as a window to gauge the Chinese government’s priorities, Julian Fisher, chair of the British Chamber of Commerce in China, told the Global Times on Tuesday.
“Is it the economy a priority now, or is it going to be a real cornerstone going forward? And will UK companies have the opportunities to [continue] building their business, growing their teams and making profits?” Fisher said.
It is also hoped that the tone-setting meeting would provide more clarification for China’s opening-up policy and creating a level playing field for all companies, he noted.
It is expected that more targeted measures will be implemented to boost foreign investment, foreign trade and the confidence of private enterprises next year, Tian Yun, a veteran economist based in Beijing, told the Global Times on Tuesday.
According to the readouts of the conference, it is expected China will further deepen comprehensive reforms next year, promoting the integration of the domestic market with the international market, Tian said.
China recently unveiled a plan to advance the opening-up of the China (Shanghai) Pilot Free Trade Zone (FTZ) and issued plans to accelerate the integration of domestic and foreign trade, which could be the preludes in this area, Tian said.
With regard to the key conference’s promoting the development and growth of private enterprises, Tian said “it is expected more financial and tax policies will be unveiled in supporting and promoting the development of China’s private economy.”
The conference also mentioned the need to effectively address obstacles for foreign nationals to come to China for business, study and tourism.
Tian said that the “very detailed expression” in the readout showed that further policies and measures are likely to be taken to facilitate international travel and promote opening-up in 2024.
To further facilitate cross-border people-to-people exchanges between China and foreign countries, and serve the country’s high-quality development and opening-up, China recently announced a one-year visa-free policy for ordinary passport holders from six countries starting from December 1, 2023.
As the world continues to face a severe economic downturn, various indicators in China reflect both a steady recovery trajectory as well as ups and downs. The country’s foreign direct investment data saw a temporary contraction despite more foreign companies having set up branches in China.
A number of Chinese government agencies have expressed their disagreement after US ratings agency Moody’s politically biased move that cut its outlook on China’s government credit ratings to negative from stable last week.
Yet, Chinese analysts said with more targeted work and forceful measures to address the bottlenecks and weak links in the current economic situation, expectations will rise and the Chinese economy is positioned on a firm track to achieve a reasonably high growth rate in 2024.
Positive factors are converging. China’s exports expanded by 0.5 percent year-on-year in November, the first expansion since April and beating forecasts.
Private-sector companies saw their share of total foreign trade climb to 53.3 percent during the January-November period, up 3.1 percentage points from the corresponding period in 2022.
A number of global institutions, including the Organisation for Economic Co-operation and Development and the IMF, have recently revised up growth forecasts for the Chinese economy.
The IMF in November raised China’s growth projection for 2023 from 5 percent in October to 5.4 percent, and from 4.2 percent to 4.6 percent for 2024.
(Global Times)
