China’s 2024 Central Economic Work Conference: 6 Key Takeaways

This piece was prepared by the APCO Greater China Team. 

From December 11 to 12, senior policymakers in Beijing convened for the Central Economic Work Conference (CEWC). The annual closed-door event analyzes the state of the Chinese economy and sets the country’s economic policy priorities for the coming year. Although the CEWC does not release key economic growth targets (these are reserved for the National People’s Congress and Chinese People’s Political Consultative Conference annual plenary meetings in March, also known as the “Two Sessions”), the official readout from the event provides insight into Beijing’s core thinking on economic policy for the year ahead.

1. The government appears confident in achieving this year’s economic goals but wary of increasing domestic challenges and geopolitical tensions.

Despite slower-than-expected economic growth in 2024, the CEWC and Politburo expressed confidence in achieving the GDP target of “about 5%” due to this year’s support measures. However, the CEWC identified “insufficient domestic demand” as a key challenge for the coming year, citing business difficulties, a weak job market and slow income growth. With the new Trump administration approaching, the CEWC also emphasized “increasing external pressure” that could “restrict development,” indicating that next year’s stimulus measures will depend on domestic demand issues and the impact of Trump’s trade policies.

2. The government will focus on strengthening the resilience of the Chinese economy, particularly domestic demand.

The CEWC reinstated “expanding demand in all directions” as the top priority for 2025, reflecting the government’s concerns about demand. To boost demand, the CEWC pledged to focus on large-scale equipment renewal and consumer goods replacement, as well as stimulating new areas of consumption, particularly the “debut, ice-and-snow and silver economies.” The CEWC also committed to addressing the root causes of weak consumption by increasing support for employment and promoting income growth for middle- and low-income groups. Additionally, it highlighted the need to stabilize the stock market and real estate sector, whose poor performance has contributed to record-high savings rates.

3. Bolder macroeconomic policies will be implemented to prop up growth next year.

This year’s CEWC introduced a “more proactive” fiscal policy and a “moderately loose” monetary policy for the first time since 2010. The CEWC highlighted reducing the reserve requirement ratio and interest rates, increasing the fiscal deficit ratio and issuing “ultra-long special treasury bonds” and “local government special bonds” to support economic stimulus efforts. The specificity of these policies signals a sustained commitment to economic support. Analysts anticipate a GDP growth target of “around 5%” for 2025, with government debt expected to rise to 4% of GDP, equating to approximately RMB 1.3 trillion in stimulus.

4. Technological innovation and industrial upgrades remain top priorities, with more efforts to ensure healthier competition on the way. 

The CEWC emphasized developing “new quality productive forces” to build a modern industrial economy, highlighting the “Artificial Intelligence (AI) Plus” initiative to integrate AI with other sectors. It stressed the need for innovative sci-tech companies to access stable capital and encouraged “patient capital” for long-term investment in technology. The readout also mentioned cracking down on “involution-style competition,” likely to protect the profitability and innovation of companies. Additionally, it called for regulating local governments and enterprises to ensure healthier competition in the technological sector.

5. China will look for ways to stabilize falling foreign investment and diversify trade. 

The CEWC emphasized the need to “stabilize” foreign trade and investment, addressing the significant decline in foreign direct investment (FDI), which fell by 27.9% year-on-year from January to November 2024. While no major new announcements were made regarding opening up, the government pledged to enhance “foreign investment promotion mechanisms” and expand opening up in the services sector. Free-trade zones will gain greater autonomy to implement reforms, serving as testing grounds for nationwide initiatives.

6. The government now views local debt as less of a risk, with more policy support expected for the property market.

This year’s CEWC readout did not mention local government debt, showing the government’s confidence in the RMB 10 trillion package to solve the issue released in November.  Instead, the section on key risks for the economy focused on efforts to stabilize the real estate market, with more supportive measures expected in 2025 and home prices predicted to stabilize in 2026.