Chinese officials restated their broad economic policy objectives on Thursday, without providing specific implementation methods,. These objectives include modernising the industrial complex, boosting domestic demand, reducing debt, and reducing risks associated with the real estate sector.

The promises were made during a crucial plenum—a meeting of the Communist Party Central Committee chaired by President Xi Jinping—that is held about every five years, according to the official news agency Xinhua.

According to the paper, Beijing intended to implement land reforms, increase domestic demand, and enhance social security, healthcare, and income distribution systems—promises that have been expressed in various official publications throughout the previous ten years.

The announcement stated that the “tasks” should be finished by 2029 but did not specify what modifications Beijing plans to make. In the upcoming days, a paper with more thorough policy proposals is anticipated to be released.

The plenum decision, according to analysts, indicated continuity rather than any changes in China’s economic development model or policymaking.

The head economist of Pinpoint Asset Management, Zhang Zhiwei, stated that “there is no clear signal of change in macro policies.”

The plenum, which the state media hailed as “epoch-making,” occurred during a period when more and more Chinese citizens were facing financial difficulties at home and more opposition to the nation’s industrial policies outside.

While the crisis-hit real estate industry and household spending continued to underperform, the second-largest economy in the world expanded at a slower rate than anticipated in the second quarter, heavily relying on industrial output and foreign demand.

More than ten years ago, during a similar plenum, China promised to address the growing imbalance between high levels of investment and output and weak demand. But instead of focusing resources on customers, it poured money into real estate and infrastructure, building debt at an unsustainable rate.

China reaffirmed in its Thursday communiqué that it aimed to “actively expand domestic demand,” but it did not provide any specifics.

“There still appears to be a tension between policies aimed at boosting economic security and expanding the supply-side of the economy, and those aimed at giving market forces a greater role and rebalancing growth toward consumption,” said Julian Evans-Pritchard, head of China economics at Capital Economics.

The declaration reiterated China’s pursuit of “new productive forces,” a phrase that Xi coined last year to describe scientific and technical advancements that may modernise industries and usher in a new period of rapid economic expansion.

“We will improve the institutions and mechanisms for fostering new quality productive forces in line with local conditions,” it stated.

Along with restating its goals to overhaul the banking and tax systems, the leadership said that China will “enhance the role of market mechanisms in the economy, create a fairer and more dynamic market environment and optimise the efficiency of resource allocation.”

Previously, markets were said to “play a decisive role” in the economy in official papers.

“Restrictions on the market will be lifted, while effective regulation will be ensured to better maintain order in the market and remedy market failures,” the report said.

(Adapted from Reuters.com)

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