China’s Economy – Seven Key Points for 2018

High-quality development and forestalling financial risk will be the major themes of China’s economic policies next year, according to decisions made at the Central Economic Work Conference, which concluded on Wednesday.

The three-day Central Economic Work Conference saw leaders analyze the country’s economic performance this year and map out plans for 2018. Here are seven major features of China’s economy for 2018 to take away from the meeting.

High-quality Development

High-quality development is the “indispensable foundation for sustainable and healthy economic development”. China must build and improve the mechanisms for pressing ahead with high-quality development, according to the statement.

In addition to efficient economic growth, analysts said, high-quality development also entails balanced social and environmentally friendly development.

A Prudent and Neutral Monetary Policy and A Proactive Fiscal Policy

“Prudent monetary policy should be kept neutral, the floodgates of monetary supply should be controlled, and credit and social financing should see reasonable growth,” read the statement from the Central Economic Work Conference. “Meanwhile, the proactive orientation of fiscal policy will be maintained, while the structure of fiscal spending should be optimized.”

The RMB exchange rate will remain “basically stable at a reasonable equilibrium level”. In addition, concrete measures will be taken to strengthen the regulation of local government debt.

Forestall Financial Risks

Authorities will continue to sanction illegal activities in the financial sector to forestall risks.

In the coming three years, the country will seek to foster a “virtuous circle” between finance and the real economy, between the financial and property sectors, and within the financial system.

Develop Housing System by Encouraging Both Purchase and Renting

China will move faster to put in place a housing system that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchase and rental in 2018.

Focus on Targeted Poverty Reduction Measures

In the coming three years, the country will work to ensure the quality of poverty reduction efforts under current standards, and focus on helping special groups and eradicating extreme poverty.

As of the end of 2016, there were 43.35 million Chinese living below the national poverty line. The country has pledged to eliminate poverty by 2020.

Pollution Prevention

Along with risk control and targeted poverty reduction, pollution control will also be a key battleground. Authorities will aim for a significant reduction in major pollutant emissions and an improvement in the overall environment.

Efforts should be focused on adjusting the structures of industries, eliminating outdated capacity, and making the skies blue again, according to the meeting.

Boosting Imports for Balanced Trade

China has vowed to increase imports and cut import tariffs on some products to promote balanced trade as part of its effort to promote a new phase of all-round opening up.

The country will expand free trade zone pilot areas and guide foreign investors to operate in the country in an efficient way, according to the statement released after the Central Economic Work Conference.

The statement also asserted the country will push for nationwide implementation of a pre-establishment administrative system and a negative list, which determines where foreign participation is prohibited or limited.

The negative list will become shorter as the country improves laws and regulations and enhances protection of intellectual property.

Source：Xinhua, ChinaDaily