Chinese leaders will be stepping up the country’s spending to rev up the local economy, state media reported, as they wrap up their annual planning meeting.
According to the country’s official news agency, Xinhua News, Chinese leader Xi Jinping chaired the meeting, which focused on boosting China’s economic growth, defusing risks, and ensuring stability. Further, with the conclusion of the annual meeting, “the proactive fiscal policy should be appropriately intensified and improved in quality and efficiency,” the report said.
The Chinese economy has expanded at about a 5% annual rate in 2023, according to AP News. However, the recovery following the pandemic was short-lived, and the economy has been forecasted to slow in 2024.
The Chinese government recently reported a rise in exports in November for the first time since April 2023 and said it expects demand to pick up. The ruling Communist Party continues to exhibit its capacity to steer the economy through challenging times and see growth regionally and globally, said the report. However, some economists doubt the rise, driven mainly by exports of vehicles and ships and by the holiday shipping rush, would continue for long.
The Xinhua report shared some of the plans of Chinese leaders in handling the current debts and resolving the crisis the property sector is facing. It noted also that China needs to “prevent and defuse risks in key areas and resolutely safeguard the bottom line against systemic risks.”
Last week, Moody’s downgraded China’s sovereign debt rating as the country faces a real estate crisis, the impact reaching local government and private financing. China’s economy has been pressured with the downturn in the property industry following defaults by a number of developers. Local governments had depended on property deals without a key source of revenue.
Concurrently, Moody’s has downgraded ratings for a number of Chinese banks and insurance companies.
The report noted the annual meeting has reaffirmed the government’s efforts in increasing the demand from Chinese businesses and consumers as part of its plan to rely less on investments in construction and export manufacturing.
Before the economic conference, the Xinhua report said the Communist Party’s powerful Politburo reviewed anti-corruption work and that “efforts should be made to tighten political oversight” in the fight against corruption.
Another key meeting, the party’s plenum, was scheduled for Jan. 8-10, 2024.
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