(Bloomberg) — China's Politburo, made up of the Communist Party's 24 top leaders, pledged to strengthen the government's fiscal policies to boost domestic demand while implementing flexible and targeted monetary policy.
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The meeting, chaired by President Xi Jinping, said the country's fiscal policy would be tightened “appropriately.” Meanwhile, monetary policy should be flexible, appropriate, targeted and effective, scrapping the previous formulation of “vigorous” policy, the official Xinhua news agency reported after Friday's meeting.
Economists are looking for signs that policymakers in the world's second-largest economy will more aggressively approach their 2024 growth target. While annual numerical targets are traditionally released in March, the Politburo meeting and an expected upcoming Central Economic Work Conference set the tone for policy in the coming year.
The government's official growth target of about 5% for 2023 is widely viewed by economists as achievable. Still, many analysts viewed the target as conservative when it was set earlier this year.
China's economy faces several challenges, and various support measures have not done much to address the country's worsening housing crisis. Tight local government finances and record low consumer confidence are also weighing on the outlook.
Authorities have recently offered further stimulus measures, including by issuing 1 trillion yuan ($140 billion) of additional government bonds to support infrastructure spending. This has raised expectations that fiscal support will be a key part of the government's strategy in 2024.
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Policymakers vowed to improve the dynamism of the economy and “consolidate” the recovery momentum. They also promised to improve the quality of economic growth while achieving a reasonable expansion rate.
The statement did not specify a date for the third plenum, a party meeting closely watched by investors for signs of China's long-term political agenda.
– With support from Zibang Xiao and Fran Wang.
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