China's Politburo Signals "Extraordinary" Counter-cyclical Measures and "Proactive" Macro Policies for 2025
Key Economic Signals from China's December Politburo Meeting
On Dec.9, the Chinese Politburo held a meeting on the current economic situation. We have some traces to follow as the central economic work conference approaches. Here are some of my personal observations of the meeting, and I’ll attach the full transcript at the end.
The Politburo's assessment signals strong confidence in achieving the 5% GDP growth target for the year despite various economic challenges. This confidence is reflected in the meeting's explicit statement that "The main goals and tasks for economic and social development in 2024 will be successfully accomplished"
全年经济社会发展主要目标任务将顺利完成
Fiscal and Monetary policy
Compared to the September Politburo meeting on economic affairs, this time's characterization of fiscal and monetary policies shows an unprecedented level of commitment to stimulus.
It specifically emphasized the implementation of a more active fiscal policy and a moderately loose monetary policy, as well as the strengthening of extraordinary counter-cyclical adjustment and implementing more proactive macro policies.
That “extraordinary“ expression is extremely unusual in previous politburo meetings and thus needs extra attention.
实施更加积极有为的宏观政策
实施更加积极的财政政策和适度宽松的货币政策，充实完善政策工具箱，加强超常规逆周期调节
The last time we saw such expression was between 2009 and 2010, after the global economic crisis.
Macro-policy Stances in Different Periods:
Consumption
Compared to September's general reference to "expanding domestic demand," the December meeting laid out a stronger statement on boosting internal consumption and capital market return.
Vigorously boost consumption, improve investment efficiency, and expand domestic demand in all dimensions.
要大力提振消费、提高投资效益，全方位扩大国内需求
I’ve heard a lot of complaining about overcapacity. Could that be a reaction to increasing barriers to Chinese goods worldwide? Whether the escalating trade war with President-elect Trump or building a unified national market requires the central government to act quickly to boost domestic consumption.
Housing Market
The December meeting put the housing market in a more prominent position after the fiscal and monetary policy. The statement to "stabilize both real estate and stock markets" comes right after domestic demand and technology in order of priority. The tone is also more definitive compared to September's "halt the decline and stabilize," which is directly positive for both capital markets and the real estate sector.
扩大国内需求，推动科技创新和产业创新融合发展，稳住楼市股市，防范化解重点领域风险和外部冲击
Below is the transcript of the economic part of the conference
The Political Bureau of the CPC Central Committee held a meeting on December 9 to analyze economic work for 2025, hear reports from the Central Commission for Discipline Inspection and National Supervisory Commission, and plan party conduct, clean governance, and anti-corruption work for 2025. Xi Jinping, General Secretary of the CPC Central Committee, presided over the meeting.
The meeting noted that this year is crucial for achieving the 14th Five-Year Plan objectives. Under the leadership of the Party Central Committee with Comrade Xi Jinping at its core, all ethnic groups across the country have responded calmly and implemented comprehensive measures. The economy has maintained overall stability with progress, while China's economic strength, technological capabilities, and comprehensive national power have continued to strengthen. New quality productive forces have developed steadily, reform and opening up have deepened, key risks have been effectively managed, and people's livelihoods have been firmly protected. The main goals and tasks for economic and social development in 2024 will be successfully accomplished.
The meeting emphasized that next year's economic work should be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implementing the spirit of the 20th Party Congress and the Second and Third Plenums of the 20th Central Committee. It should maintain the general principle of seeking progress while maintaining stability, fully implement the new development concept, accelerate the construction of a new development pattern, and promote high-quality development. This includes deepening comprehensive reforms, expanding high-level opening up, building a modern industrial system, better coordinating development and security, implementing more proactive macro policies, expanding domestic demand, promoting the integration of technological and industrial innovation, stabilizing real estate and stock markets, preventing and resolving key risks and external shocks, stabilizing expectations, stimulating vitality, promoting sustained economic recovery, continuously improving people's living standards, maintaining social harmony and stability, completing the 14th Five-Year Plan objectives with high quality, and laying a solid foundation for a good start to the 15th Five-Year Plan.
The meeting pointed out that next year should adhere to the principles of pursuing progress while ensuring stability, uphold fundamental principles and break new ground, and ensure systematic integration and coordination. This includes implementing more proactive fiscal policy and moderately loose monetary policy, enriching the policy toolkit, strengthening extraordinary counter-cyclical adjustments, coordinating policy measures, and improving the foresight, targeting, and effectiveness of macro-control. It emphasized vigorously boosting consumption, improving investment efficiency, expanding domestic demand comprehensively, leading new quality productive forces development through technological innovation, building a modern industrial system, advancing landmark reforms, expanding high-level opening up, stabilizing foreign trade and investment, preventing systemic risks, consolidating poverty alleviation achievements, promoting urban-rural integration, strengthening regional development strategies, advancing green development, and enhancing people's wellbeing.
The meeting stressed strengthening Party leadership over economic work, ensuring implementation of central decisions, mobilizing all sectors' enthusiasm, maintaining pragmatism, coordinating development and security, strengthening expectation management, improving policy effectiveness, and ensuring social stability while protecting people's livelihoods.