Targeted policy measures this year set to boost long-term economic momentum
Strengthening the sustainability and resilience of development amid
protracted uncertainties will be a key focus of China's economic
policies this year, officials and experts said.
Targeted policy measures to spur innovation, boost consumption and
deepen high-level opening-up this year are set to boost the country's
long-term economic momentum, while moderate macro support will further
tackle COVID-19-related economic losses and save policy room for any
worst-case scenarios, they said.
Their comments came as President Xi Jinping called on Monday for
establishing at a faster pace the new development paradigm featuring
dual circulation, in which the domestic and overseas markets reinforce
each other, with the domestic market as the mainstay.
Only by improving domestic circulation can China withstand the rapid
changes in the international arena, Xi said, urging the nation to always
be ready to cope with even more complex and difficult situations.
Xi, who is also general secretary of the Communist Party of China
Central Committee and chairman of the Central Military Commission, made
the remarks when addressing the opening of a study session at the Party
School of the CPC Central Committee attended by provincial and
Xi's call to strengthen awareness of potential dangers has been
echoed in recent remarks by China's central bank governor and finance
Pledging to maintain policy continuity and render more support to
economic recovery, they also highlighted the need to avoid going
overboard and ensure policy sustainability.
The People's Bank of China will prioritize stability in monetary
policy this year and "maintain sustainability of the room for
conventional monetary policy", Yi Gang, the central bank's governor,
said in an interview with Xinhua News Agency released on Friday.
Finance Minister Liu Kun said in a separate Xinhua interview that the
country will keep government spending at reasonable levels this year
and save policy room for any potential new challenges.
Experts said it would be advisable for Beijing to pursue policy
sustainability as major uncertainties linger, such as the risk of a
resurgence of the pandemic, rising waves of de-globalization and
domestic structural problems.
The country is expected to normalize its macro policy in 2021 in a
gradual and cautious manner, with only a modest slowdown in credit
growth and a fiscal deficit target at about 3 percent of GDP, versus
above 3.6 percent last year, Nomura Group economists said in a note.
While downsizing broad-based stimulus, monetary and fiscal
authorities will strengthen targeted support to key sectors this year,
such as technological innovation, small businesses, green development
and people's livelihoods, according to officials.
Some other economic authorities have also taken up spurring
technological innovation as a key task for 2021, as strengthening
self-reliance in innovation is a core part of the "dual-circulation"
The country will work hard to stabilize the economy in 2021, with
greater efforts to foster innovation-driven development as well as
promote industrial transformation and upgrading, the National
Development and Reform Commission, the top economic regulator, said
during its annual meeting in December.
"As China's economy rebounds amid the COVID-19 pandemic, the country
is turning its focus to enhancing and upgrading information technology
infrastructure," said Lily Ma, managing director of China business for
US-based cloud computing software company Nutanix.
Nutanix sees new business opportunities emerging from the country's
growing demand for digital transformation, Ma said. "We're confident in
the China market and will spend more resources and money to develop our
More opportunities will unfold for foreign businesses as the country
strives to expand domestic demand to counter external uncertainties and
continues to open its market in 2021, experts said.
Wang Wentao, China's newly appointed commerce minister, said the
nation will make full use of both domestic and international market
resources to advance the coordinated development of domestic and
external demand. Wang made the remarks during the ministry's annual work
meeting on Dec 26.
The Ministry of Commerce will work harder this year to further boost
consumption upgrading, spur new types of consumption and stabilize
foreign trade and investment, according to the meeting.
Wang Tao, chief China economist at global investment bank UBS, said
as China further integrates with the global economy, its vast and
fast-growing domestic market will attract more foreign businesses to
invest in the country.
The number of people in China with an annual personal disposal income
above $10,000 is estimated to more than double to about 680 million by
2030, she said.
With policy measures to unleash the country's huge domestic demand,
China's economy is expected to rebound rapidly in 2021 with consumption
being the major force driving economic recovery, said a new report
released by a Chinese think tank.
The Chinese Academy of Sciences' Center for Forecasting Science
estimated that China's GDP growth rate will reach 8.5 percent
year-on-year in 2021, and the nominal growth rate of consumption will
hit around 10.7 to 11.7 percent.
Xinhua contributed to this story.