China Sets Ambitious Economic Plans for 2025 with Proactive Macro Policies

China Unveils Bold Economic Pathways for 2025

In a key annual meeting known as the Central Economic Work Conference, held from December 11 to 12, 2024, in Beijing, Chinese leaders gathered to chart out the nation’s economic strategy for 2025. Chaired by Xi Jinping, General Secretary of the Communist Party and President of China, the conference aimed at concretely addressing the pressing issues facing the economy. Despite numerous challenges—including increasing external pressures and heightened internal difficulties—the leaders emphasized that the economy had managed to maintain overall stability and show consistent progress.

Priorities for Economic Development

During the two-day conference, Xi articulated several key areas of focus to ensure robust economic performance in the coming year, assigning top priority to proactive macroeconomic policies. It was underscored that in order to tackle economic complexities, there is a need to expand domestic demand and foster integrated development between scientific innovation and industrial advancements.

The conference highlighted the importance of maintaining steady growth in both the housing and stock markets and implementing measures to mitigate risks and external shocks in critical sectors. Additionally, there was a strong emphasis on stabilizing consumer expectations and enhancing market activity to nurture sustained economic recovery.

Fiscal and Monetary Policies

China’s strategy also includes a commitment to a more proactive fiscal policy. This will involve increasing the deficit rate as well as issuing ultra-long-term treasury bonds to support local governments. According to the Ministry of Finance, China's debt-to-GDP ratio stood at 67.5% at the end of 2023, well below the average of 118.2% for G20 members.

Furthermore, key figures pointed out that China's fiscal deficit has historically remained below 3%, offering ample room for increased borrowing and deficit expansion. The country’s central budget, backed by low government leverage, is predicted to support further innovative strategies.

In terms of monetary policy, the conference announced a shift towards a