Xinhua Commentary: China's pro-growth policies deliver comfort in turbulent world

BEIJING, Dec. 15 (Xinhua) -- The world's second-largest economy has sent a clear signal of enhancing pro-growth policies and opening up, offering welcome comfort to a turbulent world plagued by underwhelming growth.

According to the Central Economic Work Conference where priorities for economic work in 2025 were set, China will adopt a more proactive fiscal policy and a moderately loose monetary policy.

This marked the first "prudent" to "moderately loose" transition in China's monetary stance in more than a decade, while the commitment to more fiscal policy support includes plans to widen the fiscal deficit, increase fiscal spending and issue more bonds.

China's economic policies are unfolding within an overall picture which shows that the state of global growth remains "one of restrained expansion," as projected by the International Monetary Fund (IMF) in October 2024.

Global growth is expected to remain stable yet underwhelming, as the balance of risks is tilted to the downside, said the IMF projections, warning of possible flare-ups of geopolitical tensions, sudden eruptions of financial market volatility, continued geo-economic fragmentation, as well as disruptions to the disinflation process that could prevent central banks from easing monetary policy.

Observers said China's policy pivot has taken into account both the current need for economic growth and the necessity of long-term structural reform -- as a range of policy decisions made this week go beyond fiscal spending and monetary easing.

For instance, the top priority in policy setting for 2025 is the expansion of domestic demand, different from the top priority for 2024, which is building a modern industrial system.

The policy-setting meeting emphasized the need to comprehensively expand domestic demand. In addition, there are quite detailed explanations on enhancing consumption capability, willingness and levels, including income increases and burden reductions for middle- and low-income groups, pension increases, and more government subsidies for medical insurance covering urban and rural residents.

Analysts said this change in priority order is well justified as stronger demand will help re-balance the Chinese economy, and has multiple positive effects, serving as a driving force and stabilizer for China's economic growth, a catalyst for China's imports, and a boost for the country's investment appeal.

Another uplifting policy decision relates to a raft of measures aimed at boosting technological innovation -- for instance the launch of an AI Plus initiative, the cultivation of future industries, and the use of digital and green technologies to transform and upgrade traditional industries.

Emerging Asia, a term which refers to China, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam, features as one of the "bright spots" on the global economic landscape, as AI-driven growth in this region is providing a significant boost to global economic prospects, according to the IMF forecast.

China is seeking to integrate AI technologies into industries like manufacturing and services, hoping to raise efficiency and productivity -- which will contribute positively to the regional and global growth trajectory.

At the meeting, expanding high-level opening up and stabilizing foreign trade and investment was reaffirmed as a priority, while emphasis was placed on voluntary opening up, unilaterally and through better institutional arrangement and others.

This policy stance reflects China's persistent commitment to openness and inclusive growth, offering hope to the world wrestling with rising protectionism, tariff woes and supply chain disruptions.

To be specific, service trade, green trade and digital trade are where policy support will go to, and institutional reforms are imminent in a manner that can boost foreign investment. Also down the pike is further opening-up in the service sector.

As for expanding pilot programs in telecommunications, healthcare, education and other fields, policy interpretation by domestic experts mainly focused on the goals of getting aligned with high-standard international economic rules, sharing China's growth opportunities and boosting confidence of foreign-invested firms.

For an economy as big and diverse as China's, preventing and mitigating risks in key areas is always important. The meeting underscored the need to stabilize the real estate market, fully release the potential for rigid and improvement-oriented housing demand, and prudently handle risks of local small and medium-sized financial institutions.

According to the meeting readout, policymakers did an analysis of the weaknesses and strengths of the Chinese economy, acknowledging that a raft of incremental policies implemented in late September have effectively boosted social confidence and driven a remarkable turnaround in the economy.

China's growth trajectory in 2024 is uneven but resilient, with a strong start followed by increasing downward pressure around mid-year and a subsequent upswing in the final quarter. Thanks to all kinds of hard work, China is well-placed to meet the full-year growth target of around 5 percent.

Now with a clear-cut to-do list in hand, China, which contributes nearly 30 percent to global economic growth, will be better equipped to forge ahead, rain or shine. ■