Readout of China's Central Economic Work Conference & Full Transcript
The Central Economic Work Conference (CEWC), China's highest-level annual economic meeting, concluded on December 12. Before diving into details, here's a brief overview of how Chinese politburo meetings work:
The politburo holds monthly meetings to discuss various critical issues. Among these, four meetings each year focus specifically on economic matters. For 2024, it’s April, July, Sep, and Dec. The December meeting serves a dual purpose, also functioning as preparation for the CEWC. The CEWC itself is crucial as it maps out the nation's economic direction for the coming year and provides guidance for local officials managing their regional economies. Understanding these meetings requires careful analysis to piece together the broader picture of China's economic policy for the year ahead.
Below are my key takeaways. Feel free to share and subscribe - both free and paid subscriptions are welcome.
The general expression of the economy
This meeting placed greater emphasis and attention on changes in the external environment. When listing unfavorable factors affecting economic development,
the deepening adverse impacts from current changes in the external environment
当前外部环境变化带来的不利影响加深
was positioned prominently. "Risk prevention and resolution," which used to be listed separately, is now paired with "external shocks," highlighting policymakers' serious preparation for potential external environmental impacts in 2025 (basically Trump's tariff). I believe the proposal to "implement more proactive and effective macro policies" also aims to maintain economic growth through expanding domestic consumption in response to the uncertain international political and trade environment in the coming 2025.
Top Priority of 2025- Boosting Consumption
In Chinese documents, sequence matters. The sequence for next year’s work goes with 1. Boosting consumption, 2. Tech Innovation 3. Economic structural reform 4. High-level opening-up 5. Risk Prevention 6. Urbanization and rural development 7. Regional development 8. Environment protection and carbon emission reduction. 9. People's livelihood
Last year, it was 1. Tech Innovation 2. Domestic Demand 3. Economic structural reform 4. Opening-up 5. Risk Prevention 6. Agriculture 7. Urban-Rural Development 8. Green Development 9. People’s livelihood
Which means boosting domestic consumption back to the very top of priority. Although it was also on the top in 2022, this time’s expression has more details and emphasizes the public department’s spending and subsidies toward private departments.
Strengthen the coordination between fiscal and financial policies, effectively leverage government investment to stimulate social investment
加强财政与金融的配合，以政府投资有效带动社会投资
Whether increasing pensions or “两重”(Implementation of major national strategies and national security capability building in key areas), projects such as city renovations and urbanization of the rural migrant population require actual money spending at the central gov level.
Of course, the real estate market is also part of the consumption, considering the fact that the document also highlights “stabilize stock and housing market.” I expect Beijing and Shanghai to release their buying restrictions and provide lower interest rates for housing loans.
Shifting Policy Trajectory
It's not just one single policy shift but a collection of small changes that show a different way of doing things. Look at how they're thinking about social welfare now - it used to be like "avoiding welfare dependency that breeds laziness." But this time, they're talking more about healthcare subsidies for low-income groups and better pensions for people living in rural areas.
Appropriately increase basic pensions for retirees, raise basic pension levels for urban and rural residents, and increase government healthcare insurance subsidies for urban and rural residents.
适当提高退休人员基本养老金，提高城乡居民基础养老金，提高城乡居民医保财政补助标准。
I wouldn't call it a complete turnaround on welfare, but it does suggest they're thinking differently about how to move forward with development. We need to see actual policy on the ground to prove it.
There's a notable shift in how they're talking about policy implementation. In 2023's CEWC, they emphasized
Build up policy reserves in advance and maintain policy buffers
在政策储备上打好提前量、留出冗余度
It's kind of like keeping options in reserve.
But this year, they're being much more direct about execution: talking about grasping policy direction, timing, and strength, plus pushing for immediate action with sufficient force:
Grasp policy direction, consider timing and intensity, implement work as early as possible and with solid execution, ensure sufficient policy strength
把握政策取向，讲求时机力度，各项工作能早则早、抓紧抓实，保证足够力度
This change probably reflects lessons learned from 2024, when gradual, incremental policy moves fell short of market expectations and actually received negative market reactions-especially the stock market.
Fiscal Policy
During Monday's politburo meeting, the tone of future fiscal policy was set to be “More proactive.” CEWC remained it. Compared with the expression of “Moderately intensified fiscal policy“ in 2023, it is clearly a step forward. Besides that, the CEWC also directly promised to increase the fiscal deficit ratio and more ultra-long special treasury bonds, sending more commitment to increasing spending.
Implement a more proactive fiscal policy. Raise the fiscal deficit ratio to ensure sustained and stronger fiscal policy support. Increase fiscal spending intensity and strengthen support for key areas. Increase the issuance of ultra-long-term special treasury bonds.
要实施更加积极的财政政策。提高财政赤字率，确保财政政策持续用力、更加给力。加大财政支出强度，加强重点领域保障。增加发行超长期特别国债
Local government debt
The local government debt was not mentioned in this year's transcript. This reflects the central government's changing view on "debt." Today, Yuyuan Tantian (玉渊潭天), a social media account affiliated with CCTV, published a Weibo that well explained this shift:
Since the Central Politbreau meeting in September this year, the series of macroeconomic policy measures we've introduced reflect changes in two understandings. First, there's been a change in how we view debt and risk - shifting from emphasizing the reduction of existing debt to optimizing debt structure…….Preventing and resolving risks doesn't necessarily mean we can only reduce current existing debt. Instead, we can prevent systemic risks through debt replacement and structural optimization………..Maintaining stable economic growth is necessary to sustain fiscal revenue growth. As long as fiscal revenue continues to grow and interest payments are kept within a reasonable proportion of fiscal revenue, it can be considered sustainable.
今年9月中央政治局会议以来，我们在宏观政策方面推出的一系列措施，背后反映着两个认知的变化。
第一，是对债务和风险的认识发生了变化，从强调存量债务的减少，转向债务结构的优化。
防范和化解风险，也不意味着只能通过减少当期存量债务的方式进行，而是可以通过置换、通过结构的优化，来避免发生系统性风险的可能性。
要维持经济的稳定增长，才能维持财政收入的可持续增长。在财政收入能不断增长的情况下，只要将利息支出控制在财政收入的合理比例之内，就可以说是可持续的。
Address Involution
Comprehensively address "involution-style" competition and regulate the behavior of local governments and enterprises.
综合整治“内卷式”竞争，规范地方政府和企业行为。
President Xi's statement at this year's Two Sessions was telling: "Developing new quality productive forces does not mean ignoring or abandoning traditional industries. We must prevent overheated investment and bubbles and avoid following a single model." This addresses a growing concern: local governments are racing to build their new quality productive forces capabilities, often through questionable means like local subsidies or imposing restrictions on products from other regions. These practices not only distort market competition but also lead to significant resource waste. Looking ahead, we might see more measures to curb local governments' use of subsidies and market protectionism.
Below is the full transcript provided by
, the founder of the newsletter channel . He also provided his readout.
The annual Central Economic Work Conference was held in Beijing from Dec. 11 to 12. Xi Jinping, general secretary of the Communist Party of China Central Committee, Chinese president and chairman of the Central Military Commission, delivered an important speech at the conference. The conference was attended by Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang and Li Xi, all members of the Standing Committee of the Political Bureau of the CPC Central Committee.
In his keynote speech, Xi reviewed the economic work of 2024, analyzed the current economic situation, and laid out plans for economic work in 2025. Li Qiang delivered a concluding speech, emphasizing the implementation of Xi's instructions and outlining the tasks for next year's economic work.
The meeting emphasized that this year is key to achieving the goals and tasks outlined in the 14th Five-Year Plan (2021-2025). In the face of increasing external pressures and growing internal challenges, the CPC Central Committee with Comrade Xi Jinping at its core has united and led the entire Party and the Chinese people of all ethnic groups to respond calmly, implement comprehensive measures, and ensure the overall stability and steady progress of the economy as well as significant gains in high-quality development. The major goals and tasks for economic and social development in 2024 are expected to be accomplished. New quality productive forces have been developed steadily, reform and opening-up deepened, risks in key areas defused in an orderly and effective manner, people's livelihood strongly and effectively safeguarded, and Chinese modernization solidly advanced. It has been an extraordinary year with particularly encouraging achievements. Notably, the Political Bureau meeting on Sept. 26 decisively introduced a package of incremental policies, significantly boosting social confidence and triggering a noticeable economic rebound.
The meeting noted that the negative impacts of changes in the external environment are intensifying, and China’s economy continues to face numerous difficulties and challenges. These include insufficient domestic demand, operational struggles for some businesses, pressure on employment and income growth, and persistent risk factors. However, it is equally important to recognize that China’s economic foundation remains strong, with multiple advantages, robust resilience, and significant potential. The long-term fundamentals and favorable trends driving economic development remain intact. We must confront these challenges head-on, boost confidence, and work to turn all positive factors into concrete development outcomes.
The meeting emphasized that through practice, a deeper understanding of the regularities of economic work has been gained. The centralized and unified leadership of the Party is the fundamental guarantee for successfully managing economic work. At critical junctures and key moments, the CPC Central Committee has timely assessed situations, made decisions, and ensured the steady progress of China’s economy. It is essential to coordinate the relationship between a well-functioning market and a proactive government, creating an economic order that is both dynamic and well-regulated. Balancing total supply and demand is crucial to ensuring smooth national economic circulation. Developing new quality productive forces and revitalizing old ones should be pursued in ways tailored to local conditions. Achieving the balance between optimizing new investments and revitalizing existing assets is essential to improving resource allocation efficiency across the board. Focusing on both improving quality and increasing quantity is foundational to supporting Chinese modernization.
The meeting stressed that to do a good job in economic work next year, China must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the guiding principles of the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, adhere to the general principle of pursuing progress while ensuring stability, fully and accurately implement the new development philosophy, accelerate the forging of a new development dynamic, firmly promote high-quality development, and further deepen reform in an all-round way. China must also promote high-level opening up, develop a modern industrial system, secure both development and security, implement more proactive macro policies, expand domestic demand, and promote integrated development of scientific and technological innovation and industrial innovation. Efforts must be made to secure the steady development of the real estate and stock markets, guard against and defuse risks and external shocks in key areas, and stabilize expectations and stimulate vitality, so as to promote sustained economic recovery. Work must be done to continuously improve people's living standards, maintain social harmony and stability, accomplish the goals and tasks of the 14th Five-Year Plan with high quality, and lay a solid foundation for getting the 15th Five-Year Plan off to a good start.
The meeting stressed the importance of maintaining steady economic growth, ensuring overall stability in employment and prices, and achieving a basic balance in the international payments system, while ensuring that household income growth in sync with economic growth.
The meeting pointed out that next year, we will continue to seek progress while maintaining stability, promote stability through progress, uphold fundamental principles and break new ground, establish the new before abolishing the old, pay attention to integrated reforms, and strengthen coordination. We will enrich and improve the policy toolkit and make macro regulation more forward-looking, targeted and effective.
A more proactive fiscal policy will be implemented. We will raise the deficit-to-GDP ratio to ensure sustained and enhanced fiscal efforts. We will enhance fiscal expenditure intensity and strengthen support guarantees for key areas. We will increase the issuance of ultra-long-term special government bonds to continuously support the implementation of major national strategies and the building up of security capacity in key areas, as well as large-scale equipment upgrades and trade-ins of consumer goods. We will expand the issuance and use of local government special-purpose bonds, broadening the scope of investment areas and their use as project capital. We will optimize the fiscal spending structure for greater efficiency, focusing more on improving livelihoods, boosting consumption, and fostering growth potential while ensuring people’s basic well-being, payment of salaries, and normal government functioning at the primary level. Party and government organs at all levels should continue to act on the requirement of tightening the belts.
A moderately loose monetary policy will be implemented, with effective use of both the overall volume and structural functions of monetary policy tools. Timely reductions in reserve requirement ratios (RRR) and interest rates will be made to maintain ample liquidity, ensuring that the growth of social financing and money supply aligns with economic growth and price level expectations. The RMB exchange rate will be kept stable at a reasonable and balanced level. Efforts will be made to explore and expand the central bank's macroprudential and financial stability functions, innovate financial instruments, and safeguard financial market stability.
A well-coordinated "policy package" should be implemented effectively. We will enhance coordination of fiscal, monetary, employment, industrial, regional, trade, environmental, and regulatory policies along with reform and opening up measures. We will strengthen interdepartmental communication and feedback mechanisms to amplify policy synergy. Economic and non-economic policies should be integrated into the evaluation of macro-policy consistency, with a focus on coordinating the entire process of policy formulation and implementation to improve overall policy effectiveness.
The meeting identified the following key tasks to focus on next year.
一是大力提振消费、提高投资效益，全方位扩大国内需求。First, vigorously boost consumption, improve investment efficiency, and expand domestic demand in an all-round way. We will implement special actions to boost consumption, increase the income of low - and middle-income groups, reduce their burden, and increase their ability, willingness, and level of consumption. We will appropriately raise basic pensions for retirees, raise basic pensions for urban and rural residents, and increase government subsidies for medical insurance for urban and rural residents. We will intensify efforts to implement large-scale equipment upgrades and trade-ins of consumer goods, innovate and diversify consumption scenarios, expand service consumption, and promote the development of cultural tourism. We will actively develop the first-tier economy, the snow and ice economy, and the silver economy. Strengthen top-down organization and coordination, and give greater support to the implementation of major national strategies and the building up of security capacity in key areas. We will appropriately increase investment in the central budget. We will strengthen fiscal and financial coordination to effectively promote social investment through government investment. Plan the "15th Five-Year Plan" major projects as early as possible. We will vigorously implement urban renewal. We will implement special actions to reduce logistics costs throughout society.
二是以科技创新引领新质生产力发展，建设现代化产业体系。Second, lead the development of new quality productive forces with scientific and technological innovation and develop a modern industrial system. We will strengthen basic research and tackle key core technologies, advance the layout of major science and technology projects, and carry out large-scale demonstration actions for the application of new technologies, new products, and new scenarios. Carry out "artificial intelligence +" action to cultivate future industries. We will strengthen national strategic scientific and technological forces. We will improve the multi-tiered financial services system, strengthen patient capital, make greater efforts to attract non-government capital to participate in venture capital investment, and foster innovative enterprises in a phased manner. We will comprehensively rectify "involution" competition and standardize the behavior of local governments and enterprises. We will actively use digital and green technologies to transform and upgrade traditional industries.
三是发挥经济体制改革牵引作用，推动标志性改革举措落地见效。Third, give full play to the leading role of economic structural reform and ensure that landmark reform measures were effectively implemented. We must complete a high-quality campaign to deepen and upgrade the reform of state-owned enterprises, and introduce the private economy promotion law. We will launch a special campaign to standardize law enforcement involving enterprises. We will formulate national guidelines for building a unified large market. We will strengthen supervision and promote the healthy development of platform economy. We will carry out coordinated reform of the fiscal and taxation systems and increase the financial resources of local governments. We will deepen the comprehensive reform of investment and financing in the capital market, eliminate the bottleneck points for medium - and long-term capital entry into the market, and make the capital market system more inclusive and adaptable.
四是扩大高水平对外开放，稳外贸、稳外资。Fourth, promote high-level opening-up and stabilize foreign trade and foreign investment. Expand independent and unilateral opening up in an orderly manner, steadily expand institutional opening up, promote the quality and efficiency of the pilot free trade zone and expand the mandate for reform, and accelerate the implementation of the core policy of the Hainan Free Trade Port. We will actively develop trade in services, green trade and digital trade. We will deepen reform of the system and mechanism for promoting foreign investment. We will steadily open up the service sector, expand trials of opening up in telecommunications, medical care, and education, and continue to build an "Invest in China" brand. We will promote high-quality Belt and Road cooperation and improve the system of comprehensive overseas services.
五是有效防范化解重点领域风险，牢牢守住不发生系统性风险底线。Fifth, effectively guard against and defuse risks in key areas, and firmly hold the bottom line that systemic risks will not occur. We will continue to work hard to stabilize the real estate market, intensify efforts to transform urban villages and dilapidated houses, and fully release the potential of rigid and improved housing demand. We will appropriately control the supply of new real estate land, put existing land and commercial housing to good use, and promote the disposal of existing commercial housing. Promote the construction of a new model of real estate development, and set up relevant basic systems in an orderly manner. We will prudently handle risks of small and medium-sized local financial institutions. The central and local governments will work together to crack down on illegal financial activities.
六是统筹推进新型城镇化和乡村全面振兴，促进城乡融合发展。Sixth, promote a new type of urbanization and all-round rural revitalization in a coordinated manner, and promote integrated urban and rural development. Strictly observe the red line of cultivated land, and strictly manage the balance of arable land. We will ensure stable production and supply of grain and major agricultural products and increase overall agricultural performance and competitiveness. We will protect the enthusiasm of grain farmers and major grain-producing areas, and improve the mechanism for setting grain prices. We will promote integrated development in light of local conditions, strengthen counties, and enrich the people, and do everything possible to expand channels for farmers to increase their incomes. We will develop modern metropolitan areas, improve the modern governance of megacities, and vigorously develop county economies.
七是加大区域战略实施力度，增强区域发展活力。Seventh, intensify the implementation of regional strategies and enhance the vitality of regional development. We will give full play to the overlapping effects of the strategies for coordinated regional development, major regional strategies and functional zoning strategies, and actively cultivate new poles of growth. We will enhance the innovation capacity and radiate the leading role of regions with advantages in economic development. We will support major economic provinces in taking the lead and encourage other regions to develop their strengths according to local conditions. We will deepen industrial coordination among the eastern, central, western and northeastern regions, and vigorously develop the Marine economy and the Bay Area economy.
八是协同推进降碳减污扩绿增长，加紧经济社会发展全面绿色转型。Eighth, jointly promote carbon reduction, pollution reduction and green growth, and accelerate the comprehensive green transformation of economic and social development. We will further deepen reform of the system for promoting ecological progress. We will create a healthy environment for the development of green and low-carbon industries and foster new growth areas such as green buildings. We will promote the landmark campaign of the "Three North" project to achieve important results, and accelerate the construction of new energy bases for the "Shage famine". Establish a batch of zero-carbon parks, promote the construction of a national carbon market, and establish a product carbon footprint management system and carbon identification certification system. We will continue to advance the battle to protect our blue sky, clear water and clean land. Formulate an action plan for the comprehensive treatment of solid waste. We will carry out major projects to protect biodiversity. We will strengthen the system for preventing and controlling natural disasters.
九是加大保障和改善民生力度，增强人民群众获得感幸福感安全感。Ninth, step up efforts to ensure and improve people's well-being and enhance their sense of fulfillment, happiness, and security. We will implement employment support programs in key areas, key industries, urban and rural communities, and micro, small and medium-sized enterprises to promote employment for key groups. We will strengthen protection of workers' rights and interests in flexible employment and new forms of employment. We will implement policies to support industries and employment, ensure that no large-scale return to poverty occurs, and ensure the basic livelihood of people in need. We will promote the quality and balanced development of compulsory education and make solid progress in expanding the capacity of high-quality undergraduate programs. We implemented a medical and health care infrastructure project and formulated policies to promote childbirth. We will develop community-supported home-based care for the elderly and expand inclusive services for the elderly. Adhere to and develop the "Fengqiao experience" in the new era, and strengthen the administration of public safety systems.
The meeting pointed out that we must consciously use the scientific judgment of the CPC Central Committee on the situation to unify our thinking, will and action, so as to grasp the general trend and strengthen confidence, while facing difficulties squarely and remaining sober. We should fully implement the overall requirements and policy orientation for next year's economic work, focus on target-oriented work, and strive to achieve an optimal mix of stable growth, stable employment, and reasonable price recovery. Grasp the policy orientation, emphasize the strength of the opportunity, all the work can be early, grasp firmly, and ensure sufficient strength; Strengthen systematic thinking, pay attention to the coordination of various policies and reform and opening up measures, and amplify the effect of policies. We must focus on key links to complete key tasks for next year's economic work, address the major causes of insufficient demand, and work hard to boost domestic demand, especially consumer demand. To address the deep-seated obstacles to development and external challenges, we will unswervingly deepen reform and expand opening-up. To address the bottlenecks in industrial transformation and upgrading, we will promote the steady replacement of old growth drivers with new ones. We will strengthen policy support and improve regulatory services in response to the concerns and demands of enterprises in their operations. In view of risks and hidden dangers in key areas, we will continue to vigorously promote risk disposal. It is necessary to vigorously enhance the efficiency of implementation, fully mobilize the enthusiasm and creativity of the grassroots, continue to optimize the business environment, and better gather the joint force to promote high-quality development.
The meeting stressed that it is necessary to strengthen the Party's leadership over economic work, adhere to deliver results, enhance confidence, face difficulties head-on, and work hard to ensure that the decisions and deployments of the CPC Central Committee are implemented. It is necessary to strengthen the positive incentive and stimulate the internal motivation of making a difference. Effectively relieve the burden for the grassroots, so that cadres who want to work and will work can work and deliver results. We will resolutely punish corruption and maintain a fair and just market environment and a clean business environment. We must be realistic and pragmatic, and firmly oppose formalism and bureaucracy that are eager to show responsibility for the superior, but not responsible for the subordinates, and do not consider practical results. We will coordinate development and security, ensure production safety, and effectively prevent and respond to social security incidents in a timely manner. Strengthen coordination and interaction, oppose selfish departmentalism, and form a joint force for implementation. We will strengthen the management of expectations, coordinate the implementation of policies and guidance of expectations, and enhance the guidance and influence of policies. At the same time, it is necessary to accurately grasp the situation of the world, the situation of the Party and the social situation, strengthen strategic planning, and formulate the central "15th Five-Year Plan" proposal.
The meeting called for completing the work of ensuring people's livelihood, security and stability at the end of the year and the beginning of the year, and thoroughly investigating and resolving various conflicts and disputes and risks to ensure overall social stability.
The meeting called on the whole Party, the whole country and the whole society to unite more closely around the CPC Central Committee with Comrade Xi Jinping as the core, earnestly implement the arrangements of the meeting, fully complete the goals and tasks of economic and social development, and comprehensively advance the great cause of building a strong country and national rejuvenation with the actual results of high-quality development.
Members of the Political Bureau of the CPC Central Committee, secretary of the Secretariat of the CPC Central Committee, relevant leading comrades of the Standing Committee of the National People's Congress, State Councilors, President of the Supreme People's Court, Procurator-General of the Supreme People's Procuratorate, relevant leading comrades of the CPPCC National Committee and members of the Central Military Commission attended the meeting.
Those who participated in the meeting also included leading officials of all provinces, autonomous regions, municipalities, the Xinjiang Production and Construction Corps, the relevant central and state departments, relevant people's organizations, centrally-administered financial institutions and enterprises, and departments of the Central Military Commission. Enditem