Why It Matter?
Because I say so. OK, these four consecutive articles are important because the author is “Zhong Caiwen.”中才文. This is the pen name for the Office of the Central Financial and Economic Affairs Commission中央财经委员会办公室. It is the top-level economic decision-making and coordination body within China’s highest leadership, like the supreme command center for economic policy. A similar example is the more commonly seen “Ren Zhongping” (People’s Daily important commentary).
Ministries and commissions like to use pen names in their writing. I think there are two considerations: if they go through a ministry's or commission's formal document approval process, the internal review and approval procedures are often much more complicated. Using a designated collective pen name allows for a relatively faster response. On the other hand, if the article were published under an individual’s name, it would not fully represent the institutional stance, so the commission uses a collective pen name.
The last time the Central Financial and Economic Affairs Commission published a series of consecutive articles was during last year’s National Day holiday, which focused more on the 15th Five-Year Plan. My reading experience was that it was more like a supplement of incremental information to the content of the July Politburo meeting.
These four articles represent the Central Financial and Economic Affairs Commission Office’s assessment of the current economic situation, which is why I think they deserve attention.
What views do these four articles reflect?
These four articles follow a “3+1” structure. The first three articles explain the current state of China’s economy, while the fourth shapes policy expectations by laying out priorities for the next phase of work.
The first article discusses the resilience and vitality of China’s economy, focusing on its structure, namely the development of new growth drivers such as robotics, artificial intelligence, and high-end manufacturing. The second article focuses outward, explaining the positive impact of China’s economy on the world, including the spillover of clean energy technology and the outward layout of manufacturing, pushing back against the “China shock” narrative. The third article explains the recent 4.7% economic growth rate and why incremental policies were not introduced as many had expected.
The fourth article is especially important. It lists the priorities for the coming months, including one key judgment: goods consumption has already tended toward saturation, and services consumption is where the focus of expanding consumption should be going forward. (This confirms the view I expressed in my reading of the late-July Politburo meeting.)
From the text, the current policy focus remains on the supply side of the services sector.
In some areas of China, goods consumption has already tended toward saturation or entered a phased plateau. We need to adapt to the consumption needs of different groups, expand high-quality supply, and actively cultivate and strengthen emerging consumption. Services consumption is the key area for future consumption expansion. We need to innovate consumption scenarios, optimize the consumption environment, and tap the potential of services consumption.
Compared with previous years, this year’s policy documents and the way discussions are framed both show that the emphasis has shifted more toward services consumption. The characterization that “goods consumption in some areas of China has already tended toward saturation or entered a phased plateau” means that, in the short term, the policy side will no longer place special emphasis on stimulating physical goods consumption. Policy resources will shift toward expanding service consumption.
In addition, the article mentions “expanding imports and promoting balanced trade development.” In my view, this means that China’s approach to resolving the long-standing European complaints about the China-EU trade deficit is not to restrict exports, but to increase imports from Europe. Of course, whether this can be resolved still depends, in my view, on whether Europe can provide the goods China needs. This still depends on the outcome of subsequent negotiations between the two sides.
Other thoughts:
From the order in which the articles are arranged, the first of the four already focuses on industrial upgrading, still using the qualitative framework of “stability,” “resilience,” “newness,” and “quality.” Only the third article looks back and explains the 4.7% economic growth rate in the first half of the year, which reads more like a response to the growth rate falling short of the externally expected 5.0%. This shows that the assessment of the economic situation still centers on structural optimization rather than simply fixating on the growth rate itself. That said, considering that this year’s growth target has already been lowered from last year’s 5%, the government will hold the lower bound of growth, while whether it can reach the upper bound is more a matter of “doing what one can.”
On incremental policy:
The pace of fixed investment deployment will be accelerated, but there will be no large-scale expansionary policies.
The fourth article mentions at the very beginning that in the first half of the year, the average daily balance of funds in the national treasury was relatively large. The purpose is to urge local governments to speed up spending. Money sitting idle in the treasury means the government needs to improve the efficiency of existing funds. The next step is to accelerate disbursement, speed up investment implementation, and put the money to use. Later in the article, it also mentions promoting investment to “stop declining and stabilize,”止跌回稳, urging local governments to spend the existing investment that has already been deployed but not yet disbursed.
If you look at it from the expectations-management perspective, this can also be seen as a way of showing the reserves of policy, demonstrating that available resources remain sufficient, and that even if large-scale stimulus is not introduced for the time being, there is still enough ammunition to respond to changing conditions.
But looking back at the third article, it also mentions that “the focus of China’s current investment policy is not simply to maintain a certain speed, but to better adapt to the requirements of high-quality development and pay more attention to investment quality and comprehensive efficiency.”(当前我国投资政策的着力点不是要简单维持一定速度，而是更加适应高质量发展要求，更加注重投资质量和综合效益。) This means there will be no “spending for the sake of maintaining investment growth.” Resources will still be concentrated on the “six networks” (water networks, new-type power grids, computing power networks, new-generation communications networks, urban underground pipeline networks, and logistics networks) and on people’s livelihoods.
Below is the full text of four essays that I translated using AI.
The Resilience and Vitality of China’s Economy（Aug.22）
Zhong Caiwen
Since the beginning of this year, under the strong leadership of the Communist Party of China Central Committee with Comrade Xi Jinping at its core, all regions and government departments have taken active steps and risen to challenges. They have effectively responded to various external shocks and domestic difficulties and made solid efforts to promote high-quality development. China’s economy has shown a trend of shifting toward new growth drivers and an improved structure, producing noteworthy results. In the first half of the year, the main macroeconomic indicators remained generally stable. Gross domestic product (GDP) grew by 4.7 percent, continuing to rank among the highest of the world’s major economies. Prices rose at a reasonable pace, employment remained generally stable, and the balance of international payments was broadly maintained. Meanwhile, the profits of industrial enterprises above the designated size increased by 18.7 percent, national general public budget revenue rose by 4.7 percent, and the economic performance of some market entities improved.
China’s economy is currently at a critical stage in which old and new growth drivers are shifting at a faster pace and the development model is undergoing transformation. In assessing China’s economy, one should not look only at the speed of growth, still less dwell on whether the figures for a particular quarter or month are high or low. Instead, greater attention should be paid to the quality of economic performance, with a focus on the substance of scientific and technological innovation, the level of industrial development, and the sustainability of economic growth, as well as on whether enterprises—the main entities engaged in business operations—possess vitality. In fact, viewed in terms of quality and efficiency and from a longer-term perspective, profound changes are taking place in China’s economic development, demonstrating powerful resilience and vitality.
China’s scientific and technological innovation is steadily being translated into industrial competitiveness. Since the beginning of this year, many striking achievements have been made in science and technology. For example, new breakthroughs have been achieved in key and core technologies such as integrated circuits; China has moved to the forefront of the world in the research and development of innovative drugs; and Chinese rockets have been successfully recovered both at sea and on land. The supporting and leading role of new growth drivers has strengthened. In the first half of the year, the value added of the equipment manufacturing and high-tech manufacturing industries grew by 9.3 percent and 13.3 percent, respectively, maintaining sound momentum. They are expected to open up new space for development through technological empowerment. The research, development, and application of robotics and artificial intelligence are gaining strong momentum. Industrial robots, surgical robots, cleaning robots, and bionic robots are becoming representative products of “intelligent manufacturing in China.” Artificial intelligence is driving the manufacturing sector’s orderly transition toward intelligent, digital, and green development, while the transformation and upgrading of traditional industries are accelerating.
China’s position as a hub in global industrial and supply chains continues to grow stronger. China has deployed innovation chains around industrial chains and used innovation chains to strengthen the latter. For a new energy vehicle, more than 10,000 parts and components can be assembled within four hours at an automaker in the Yangtze River Delta. For a humanoid robot, efficient collaboration among various enterprises in the Pearl River Delta can create a “one-hour industrial ecosystem.” China’s exports of intermediate goods have grown rapidly, supplying key parts and components to global industrial and supply chains and effectively ensuring their stable operation. China’s complete industrial and supply chains have not only improved production efficiency both within China and around the world, but also provided greater certainty for stable global economic growth.
Chinese enterprises are undergoing a remarkable digital and intelligent transformation as they restructure themselves. Some enterprises use big data to assess market demand and artificial intelligence algorithms to optimize production scheduling. Through flexible manufacturing and customized services, they can precisely meet market demand for small-batch and personalized products. Some enterprises use digital production systems to seamlessly connect production lines, logistics centers, and consumer orders, achieving integrated, end-to-end fulfillment with “zero contact.” This greatly shortens delivery times and ensures that products reach consumers in a “fresher” state. Some construction enterprises are applying industrialized standards, digital precision, and automated efficiency to turn the building of “good homes” from “construction on worksites” into “manufacturing in factories.” Changes of this kind have greatly expanded enterprises’ scope of operations, enabled them to break through geographical constraints, and demonstrated their strong vitality.
Risks and hidden dangers in China’s economic operation are being addressed and contained in an orderly manner. Since the beginning of this year, the property market has shown stronger signs of bottoming out and stabilizing. In some first- and second-tier cities, transactions involving previously owned homes have increased significantly and exceeded sales of new homes. Prices have stabilized, and inventory pressure has eased to some extent. Existing hidden debts of local governments are being replaced in an orderly manner, while the number of local government financing vehicles continues to fall. Reforms aimed at defusing risks among small and medium-sized financial institutions, reducing their number, and improving their quality are steadily advancing, and the number of high-risk local small and medium-sized financial institutions has declined. Overall, we have strictly controlled new risks, appropriately handled existing ones, and rigorously guarded against sudden defaults and other major risk events. In preventing and defusing major risks in the economic sphere, we have held the line against systemic risk.
The China Council for the Promotion of International Trade recently organized a delegation of business representatives to visit the United States, reflecting the aspirations and shared views of the business communities of both countries. During face-to-face exchanges, members of the U.S. business community spoke highly of China’s strengths in emerging fields such as advanced manufacturing, artificial intelligence, clean energy, quantum computing, and life sciences. They called for expanded pragmatic cooperation while maintaining necessary competition. At the same time, executives of a number of U.S. companies investing in China said that the Chinese government’s efforts to stimulate domestic demand, safeguard and improve people’s well-being, strengthen public services, and enhance local research and development capabilities would bring bright prospects for China’s economy. These efforts would also create new scenarios and new opportunities for multinational companies to deepen their presence in China. They said they would increase investment and expand their operations in China, casting a “vote of confidence” in the country through concrete action.
China’s economy is like a vast ocean, capable of withstanding winds and waves. It has the solid foundation accumulated through more than 40 years of reform and opening up, as well as a vast consumer market, a strong manufacturing base, well-developed infrastructure, a large pool of talent, and complete industrial and supply chains. The underlying conditions supporting China’s long-term economic growth and the fundamentals of its positive trajectory have not changed. In assessing China’s economy, only by fully understanding the country’s various strengths and enormous potential can one avoid “letting floating clouds obscure one’s view.” In the second half of the year, as major projects identified in the central and local 15th Five-Year Plans and national-level special plans successively begin construction, and as macroeconomic policies are applied in a timely and more effective manner, China’s economy will undoubtedly remain within an appropriate range and successfully accomplish the goals and tasks for the entire year.
China Is an Active Contributor to World Economic Growth and a Powerful Anchor of Stability(Aug. 23)
Zhong Caiwen
Since the beginning of this year, in the face of a grave and complex external environment marked by intertwined changes and turmoil, China’s economy has forged ahead under pressure and continued to move toward innovation and higher-quality development, demonstrating vigorous vitality and strong resilience. This has not only laid a solid foundation for a good start to the 15th Five-Year Plan period, but also injected powerful momentum and much-needed certainty into the world economy.
China is a primary engine of the world economy and has made important contributions to global development and prosperity. For many years, China has accounted for around 30 percent of global economic growth, making it indisputably the world’s “number one engine.” In the first half of this year, China’s economy grew by 4.7 percent, in line with the annual target and among the highest growth rates of the world’s major economies, continuing to stand out from the rest. Domestic demand played the leading role, contributing more than 80 percent of economic growth, with consumption alone accounting for nearly 50 percent. The recently released 15th Five-Year Plan for Expanding Consumption is China’s first national-level special plan in the field of consumption. In the coming years, the potential and scope of Chinese consumption will be further unleashed. In the first half of this year, China’s consumer price index rose by 1 percent year on year. This reasonable recovery in prices was consistent with the requirements of macroeconomic regulation and stood in sharp contrast to the situation in many countries, where rising global prices for energy, raw materials, and other goods have driven up inflation and eroded consumers’ purchasing power. China’s economy is characterized by solid foundations, numerous strengths, strong resilience, and enormous potential. The supporting conditions and underlying trend for its long-term growth remain unchanged. China will continue to be the most powerful, stable, and reliable source of momentum for global economic growth.
China is an anchor of stability for global industrial and supply chains, providing strong support for the smooth functioning of the world economy. Whether confronting the COVID-19 pandemic or the repercussions of geopolitical conflicts, China has consistently remained a staunch defender of the resilience and stability of global industrial and supply chains. Since late February this year, the conflict involving the United States, Israel, and Iran has disrupted passage through the Strait of Hormuz, creating tight supplies of international crude oil and key raw materials. Thanks to the accelerated green transformation of China’s economy and society in recent years, nearly four out of every 10 kilowatt-hours of electricity consumed across the country now come from green energy. The retail penetration rate of new energy vehicles in China has also continued to rise, reaching a cumulative 54.1 percent in the first half of the year. Drawing on its formidable strengths in new energy, China has actively responded by reducing crude oil imports, greatly easing the pressure driving up international oil prices. China’s industrial sector has maintained efficient and stable production, offsetting supply shortfalls caused by production stoppages and logistical disruptions in certain regions. The Wall Street Journal stated that China had supported the world economy by reducing its oil imports. France’s Le Figaro argued that China had saved the world economy for the second time since the 2008 international financial crisis. Through technological innovation and robust market competition, China has built the world’s largest and most complete new energy industrial and supply chain system. Over the past decade and more, it has helped reduce the average levelized cost of wind and photovoltaic power generation worldwide by more than 60 percent and 80 percent, respectively. China’s advanced and practical technologies in photovoltaics, wind power, and energy storage, together with its high-quality products such as electric vehicles and electric motorcycles, have turned the dream of an energy transition into reality for many developing countries. Distributed photovoltaic and microgrid projects undertaken by Chinese enterprises in sub-Saharan Africa have lit up the African night. Going forward, China will further guide the rational and orderly cross-border distribution of industrial and supply chains, align its efforts with the industrialization aspirations of Global South countries, and help more countries develop their economies, expand employment, and improve people’s well-being.
China is one of the world’s sources of scientific and technological innovation, injecting powerful innovation-driven momentum into global economic development. Innovation is an important endogenous driver of economic growth. Through its own philosophy of innovation-driven development and successful practices, China is becoming one of the world’s leading arenas for innovation on a massive scale. China’s innovative capabilities have increased significantly. According to a report by the World Intellectual Property Organization, China rose from 34th place in the Global Innovation Index in 2012 to 10th place in 2025, while the number of its science and technology clusters ranked among the world’s top 100 has been the highest globally for three consecutive years. Since the beginning of this year, China’s innovation achievements have continued to attract worldwide attention. The humanoid robot “Lightning” broke the human world record in a half-marathon in a single stroke; the semiconductor industry’s “Tao’s Law” emerged; China’s space program achieved a succession of major breakthroughs, including both maritime and land-based rocket recovery; and Kimi K3, the world’s first open-source large model with nearly three trillion parameters, was unveiled to great acclaim. China’s innovation achievements are reaching the world at an accelerating pace. In the first half of this year, eight out of every 10 humanoid and quadruped intelligent robots sold worldwide were made in China, while the total value of overseas licensing transactions involving Chinese innovative drugs reached approximately US$110 billion. A growing number of foreign-invested enterprises have said that China has developed into a “super training ground” for global technological innovation and a “hard-core gym” for competitiveness: developing in China enables companies to better exercise their innovation “muscles” and strengthen their competitive “physique.” China is increasingly becoming an enabler of global innovation. In July this year, the World Artificial Intelligence Cooperation Organization was formally established in Shanghai. This was a major initiative by China to respond to the calls of the Global South and unite the international community in actively promoting the development and governance of artificial intelligence. Foreign media have commented that the principles advocated by China—being people-centered and using AI for good—together with the open-source nature of Chinese AI technology, are more closely aligned with the trends of scientific and technological innovation and the needs of Global South countries. They will help bridge the global intelligence divide and ensure that all parties benefit on an equal footing.
China is a practitioner of mutual benefit and win-win cooperation, creating broad space for the cooperative development of countries around the world. Facts offer the best rebuttal to distortions and smears such as the “China Shock 2.0” and “China squeeze” narratives. Chinese manufacturing improves the well-being of people in countries around the world. As the world’s largest manufacturing country, China continues to provide the global market with high-quality, competitively priced, stable, and reliable products. During the recent heat wave that swept across Europe, Chinese air conditioners brought relief to European consumers and became so popular that they were difficult to find. Behind this “cool strength” lay Chinese companies’ keen insight into overseas market demand, the rapid response of their complete industrial chains, their leading energy-saving and environmentally friendly technologies, and the fast deliveries made possible by the China-Europe Railway Express. The benefits of Chinese manufacturing are shared by consumers and partners worldwide.
The Chinese market provides new opportunities for global development. In today’s world, the market is the scarcest resource. China imports goods worth more than 20 trillion yuan annually and is a major export destination for nearly 80 countries. While some countries are turning toward protectionism, China has consistently remained committed to expanding opening up. By lowering import tariffs, hosting the China International Import Expo, and launching the “Export to China” series of activities, it has provided vast market space for goods and services from around the world. Beginning on May 1 this year, China fully implemented zero-tariff treatment for all 53 African countries with which it has diplomatic relations, marking another milestone in China-Africa economic and trade cooperation. Facts have shown that the “shock” and “squeeze” narratives are false propositions that call a deer a horse and distort the truth. China’s high-quality economic development has brought the world new and even greater opportunities.
What Does Economic Growth of 4.7 Percent in the First Half of the Year Tell Us?
Zhong Caiwen
True strength reveals itself amid wind and rain, and confidence is forged through trials. In the first half of the year, China’s economy forged ahead under pressure, maintaining a generally stable trajectory while continuing to shift toward new growth drivers and higher-quality development. Gross domestic product (GDP) grew by 4.7 percent year on year. We responded forcefully to changes in the external environment, including geopolitical conflicts and economic and trade frictions, and effectively navigated a complex domestic situation marked by strong supply and weak demand as well as an overlap of longstanding and emerging problems. These hard-won achievements are all the more valuable.
Measured against the target, 4.7 percent is an economic growth rate that meets expectations. The Central Economic Work Conference and the annual sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference set the expected economic growth target for the full year at 4.5–5 percent. The 4.7 percent growth recorded in the first half falls within this reasonable range. It accords with the Party Central Committee’s sound assessment of the economic situation and the requirements of its policy arrangements, laying a solid foundation for a good start to the 15th Five-Year Plan period. Major economic indicators remained stable, while employment and prices were broadly steady. The 4.7 percent growth rate was broadly consistent with current conditions in factor supply, technological progress, institutional innovation, and other areas. It is a realistic rate aligned with China’s potential economic growth rate. Major economic provinces generally grew faster than the national average, playing their role as pillars of the economy. At the same time, China’s financial risks continued to recede in the first half of the year, local government debt risks were defused in an orderly manner, and various constraints remained appropriately balanced, leaving room for responding to uncertainty and improving the quality of development.
Viewed in terms of its composition, 4.7 percent is a growth rate with real substance. Behind this figure lies an economy shifting toward new growth drivers and an improved structure, delivering a high-quality development report card underpinned by solid stability and sustained by forward momentum. Its technological content is higher. New quality productive forces have steadily gathered momentum. Innovative enterprises with core technologies that play leading roles in industrial chains, as well as specialized and sophisticated enterprises focused on particular market segments, are emerging and growing at a faster pace. In the first half of the year, new growth drivers directly contributed more than 40 percent of economic growth. Artificial intelligence is empowering industries across the board. A succession of new-generation open-source large models has recently been released, while China has systematically put forward its approach to building an AI ecosystem and establishing an order for AI governance. Innovative achievements continue to emerge, and the number of AI-related patents granted rose by 34.8 percent year on year.
The growth rate also has a stronger green component. The transition toward green and low-carbon energy has accelerated, with clean energy accounting for 36.2 percent of electricity generated by enterprises above the designated size in the first half of the year. New green growth drivers expanded rapidly: lithium battery output increased by 39.3 percent, the cumulative retail penetration rate of new energy vehicles reached 54.1 percent, and the development of zero-carbon industrial parks and zero-carbon transport corridors proceeded in an orderly manner.
Its contribution to people’s well-being is also more tangible. China implemented measures to stabilize employment, expand job opportunities, and improve job quality, while strengthening social security. Residents’ incomes increased steadily. In the first half of the year, China’s per capita disposable income grew by 5.2 percent year on year in nominal terms. The consumer market continued to expand, and new growth areas such as services consumption and experience-based consumption continued to develop. Retail sales of services rose by 5.3 percent in the first half, while consumption in lower-tier markets, including county-level areas, recorded the fastest growth. Holiday consumption and inbound consumption also remained robust.
Having forged ahead under pressure, the 4.7 percent growth rate demonstrates powerful resilience. As worsening external headwinds overlapped with domestic cyclical and structural pressures, China’s economy rode out the storm and delivered a satisfactory report card, demonstrating a strong capacity to withstand shocks and regulate itself.
Externally, geopolitical turbulence has persisted, and the conflict in the Middle East has disrupted global energy markets, leaving many countries facing energy shortages and soaring oil prices. China made early arrangements to develop a new energy system and a petroleum reserve system while implementing a market-diversification strategy. Its efforts to ensure energy supplies and stabilize prices have proved forceful and effective. No market shortages of petroleum products or similar problems have occurred over the past six months, and the foundations of China’s energy security have grown increasingly solid. Meanwhile, against a backdrop of rising global trade protectionism and increasing tariff and non-tariff barriers, Chinese products have won favor among consumers in a growing number of countries because of their strong value for money. China’s exports have remained robust. From electric vehicles, lithium batteries, and photovoltaic products to artificial intelligence, robots, and innovative medicines, Chinese products are reshaping the country’s foreign trade landscape through cutting-edge technologies and original innovation.
Domestically, addressing risks accumulated over many years in areas such as local government debt, the property market, and small and medium-sized financial institutions has objectively produced a certain contractionary effect on the economy and required some sacrifice in terms of economic growth. These short-term costs, however, have secured long-term stability and sustainable economic and social development. At the same time, judging from market fundamentals, the imbalance between strong supply and weak demand remains pronounced. In particular, China faces considerable pressure in halting the decline in investment and restoring stable growth. The rate of investment growth is closely related to a country’s stage of development. At present, the focus of China’s investment policy is not simply to maintain a particular growth rate, but to better meet the requirements of high-quality development and give greater attention to investment quality and overall returns. In the first half of the year, China concentrated its efforts on strengthening the coordinated development of the “six networks,” promoting the renewal and upgrading of manufacturing, and addressing weaknesses in water conservancy facilities and urban underground pipeline networks, directing more resources toward investment in the future and in people’s well-being.
Looking ahead, the 4.7 percent growth rate has substantial momentum behind it. China’s economic development enjoys ample room for maneuver, enormous market potential, and powerful resilience and vitality.
There is potential for growth. As research and development investment continues to increase, China’s capacity for original innovation is steadily strengthening, and scientific and technological innovation is becoming deeply integrated with industrial innovation. Innovation-driven development is emerging as a powerful engine of China’s economic growth. China has one of the world’s largest talent pools, and its human-capital advantage is steadily shifting from a demographic dividend based on quantity to one based on quality. New factors of production, including data and computing power, continue to empower traditional factors, jointly supporting high-quality economic development.
Reform will continue to generate dividends. We place emphasis on using reform to solve development problems, and the economy’s endogenous momentum is continuously strengthening. The development of a unified national market is advancing in depth. Prominent problems involving local governments’ noncompliant investment-promotion practices, barriers to market access, bidding and tendering, and other areas are being rectified. This will broaden and deepen China’s market and further unlock the potential of its enormous scale. Continued comprehensive measures to address “involution-style” competition will foster a healthier market environment, compelling enterprises to move beyond competition based solely on price and accelerate the transition from scale expansion and price competition to quality improvement and value-based competition.
There is also room for policy action. Unlike some economies that rely on high debt and large deficits to stimulate growth, China has not followed a path of excessive dependence on forceful policy stimulus. Its aggregate policies have remained proactive and effective, while structural policies have applied precisely targeted measures, thereby avoiding the creation of “policy dependence.” Overall, the supporting conditions and underlying trend for China’s long-term economic growth remain unchanged. China has an ample toolkit of macroeconomic policies and still has considerable room for countercyclical adjustment. It is well positioned to introduce pragmatic and effective incremental policies in response to changing circumstances and is capable of accomplishing its economic and social development goals and tasks for the full year.
Steadily Advancing High-Quality Development for the Long Term
Zhong Caiwen
The meeting of the Political Bureau of the Communist Party of China Central Committee held on July 30 made comprehensive arrangements for economic work in the second half of the year. It called for the economy to continue developing toward new growth drivers, higher quality, and better performance, and for efforts to secure a good start to the 15th Five-Year Plan period. To successfully carry out economic work in the second half of the year, we must thoroughly implement the decisions and plans of the Party Central Committee, intensify countercyclical adjustments, fully leverage the effectiveness of existing policies, and promptly plan and introduce pragmatic and effective incremental policies to strengthen the momentum of development and stimulate social vitality.
Macroeconomic policies must be more proactive, effective, and efficient. China should continue implementing a more proactive fiscal policy and a moderately accommodative monetary policy. In the first half of this year, the average daily balance of the national treasury was relatively high, indicating that substantial fiscal funds were available. The pace of fiscal spending and the use of bond proceeds should be accelerated so that tangible progress is achieved as quickly as possible. Fiscal operations must be closely monitored and treasury funds effectively allocated to ensure that primary-level governments have the resources needed to meet the basic needs of ensuring people’s livelihoods, paying salaries, and maintaining normal government operations. A range of monetary policy tools should be employed and adjusted as appropriate to maintain ample liquidity, improve the monetary policy transmission mechanism, and keep the cost of social financing at a low level. Structural monetary policy instruments should be properly implemented to provide stronger support for key areas such as expanding domestic demand, promoting scientific and technological innovation, and assisting small, medium-sized, and micro enterprises. Coordinated fiscal and financial policies to stimulate domestic demand should be optimized, creating a transmission chain in which fiscal policy provides guidance, financial instruments amplify its impact, and market-based operations deliver results. Assessments of consistency in macroeconomic policy orientation should be strengthened. Reasonable transition periods must be provided when major policies affecting enterprises’ production and operations are adjusted.
Domestic demand must be effectively expanded through sustained efforts. Consumption of goods in some sectors of China’s economy is already approaching saturation or has entered a temporary plateau. It is therefore necessary to respond to the consumption needs of different groups, expand the supply of high-quality goods and services, and actively cultivate and strengthen emerging forms of consumption. Service consumption will be a key area for future consumption growth. New consumption scenarios should be developed, the consumption environment improved, and the potential of service consumption unlocked. Fixed-asset investment declined by 5.7 percent in the first half of the year, making it necessary to halt the decline and restore stable investment growth. Projects and funding should be better coordinated, and the planning and development of the “six networks” should advance steadily. Stronger factor support must be provided, and the construction window offered by the peak season in the third quarter should be fully utilized to accelerate the approval and commencement of major projects already identified in the 15th Five-Year Plan. This year, 800 billion yuan has been allocated through new policy-based financial instruments, mainly to supplement the capital of major projects. These funds should be directed to specific projects as quickly as possible to leverage greater private investment.
Innovation must lead the way in accelerating the development of a modern industrial system. Basic research is the source of the entire scientific system and the foundation for solving all technological problems. Long-term and stable support for basic research should be increased, the capacity of the scientific and technological innovation system to make coordinated breakthroughs should be strengthened, and the deep integration of scientific and technological innovation with industrial innovation should be promoted. The “AI Plus” initiative should be implemented in depth to create new forms of the intelligent economy and enable artificial intelligence to empower industries across the board. At the same time, the AI governance system should be improved and the legislative process for foundational AI laws accelerated. Since the beginning of this year, demand for AI computing power has grown rapidly, driving faster development of the semiconductor industry. China must strengthen the supply of advanced computing power while avoiding indiscriminate or excessive expansion. Efforts should be made to achieve breakthroughs in frontier technologies, develop industries of the future, foster emerging pillar industries, and continuously advance the transformation and upgrading of traditional industries.
Contradictions must be confronted directly to foster a fair and orderly environment for market competition. Regulations on developing a unified national market should be formulated and implemented. Local investment-promotion practices and corporate competitive conduct should be regulated through both negative and positive lists. Comprehensive measures should continue to address “involution-style” competition, particularly disorderly low-price competition in certain sectors, and guide relevant industries back toward value-based and rational competition. In recent years, corporate accounts receivable have continued to grow rapidly, while average collection periods have lengthened and debt recovery has become increasingly difficult. This has become a deep-seated problem troubling businesses. Regular mechanisms should be established to resolve payment arrears owed to enterprises, and malicious defaults should be investigated and rectified. Governance mechanisms for platform enterprises should be improved to promote the regulated and healthy development of the platform economy. Pricing reforms for public utilities such as water, gas, and heating should be advanced gradually and steadily.
Domestic and international priorities must be coordinated to expand the scope for mutually beneficial international economic and trade cooperation. The more turbulent and complex the external environment becomes, the more firmly China must uphold opening up and promote win-win cooperation across multiple fields. Trade in intermediate goods, cross-border e-commerce, digital trade, and green trade should be actively expanded, while trade in services should be vigorously developed. Imports should be increased to promote more balanced trade, and the China International Import Expo should be successfully organized. The management system for outbound investment and the comprehensive overseas service system should be improved to make outbound investment more sound and secure and to strengthen the protection of China’s overseas interests. China should actively attract and utilize foreign investment, bolster foreign investors’ confidence in investing and developing in China, and support foreign-invested enterprises in maintaining a long-term presence in the Chinese market.
A solid foundation must be laid by maintaining an unwavering focus on agriculture, rural areas, and rural residents. Regular, targeted assistance should be carried out in depth to consolidate and expand the gains of poverty alleviation and ensure that no large-scale return to or descent into poverty occurs. Food security is a matter of fundamental national importance. China’s summer grain output exceeded 300 billion jin for the first time this year. Continued efforts must be made to ensure strong agricultural production and secure bumper harvests of autumn grain and grain for the full year. The production and prices of hogs and other agricultural and livestock products should be stabilized, and the high-quality development of the beef cattle and dairy cattle industries should be advanced. The development of high-standard farmland is an important vehicle for implementing the strategy of securing food supplies through the sustainable use of farmland and advances in agricultural technology. Sound mechanisms for its construction, operation, and maintenance must be established to ensure that every plot developed meets the required standard and delivers lasting benefits.
Multiple measures must be taken to strengthen public well-being effectively and substantially. Employment is the foundation of people’s livelihoods. The number of college graduates has reached a new high of 12.7 million this year, making it necessary to increase employment support for key groups. China currently has around 200 million people in flexible employment, including a large number engaged in new forms of employment, and measures to protect their rights and interests must keep pace. The impact of artificial intelligence on employment should be thoroughly assessed and effectively addressed, so that technological progress and inclusive employment can advance together. Expanding consumption requires strengthening residents’ capacity and willingness to spend. Pragmatic measures should be studied and introduced to increase the incomes of urban and rural residents through high-quality development. Inclusive, foundational, and safety-net programs for people’s well-being should be strengthened. Services and support for older people and children should be improved, and a tiered and categorized social assistance system should be established. The initiative for sustained improvement in air quality should be implemented in depth, the three landmark campaigns under the Three-North Shelterbelt Forest Program should be successfully carried out, and the goals of peaking carbon emissions and achieving carbon neutrality should be advanced actively and prudently.
The bottom line must be upheld and security safeguards firmly reinforced. As an ancient saying reminds us, “Those who are discerning prevent disasters before they arise; those who are wise prepare for future dangers.” We must adopt bottom-line thinking and effectively prevent and defuse all types of risks. The real estate market should be stabilized, and urban renewal should be advanced to a high standard. The package of measures for resolving debt risks should be properly implemented, and local government debt risks prudently defused. Financial risk prevention and control should be strengthened, while reforms to resolve risks, reduce the number, and improve the quality of local small and medium-sized financial institutions should advance steadily. Comprehensive reform of investment and financing in the capital market should be deepened, mechanisms for bringing medium- and long-term funds into the market further improved, and the resilience of and confidence in the capital market strengthened. All types of risks and hidden dangers should be thoroughly investigated and rectified, major and especially serious accidents resolutely prevented, and the safety of people’s lives and property, as well as overall social stability, effectively safeguarded.
China’s economic development enjoys ample room for maneuver, enormous market potential, and powerful resilience and vitality. We must remain confident, rise to challenges, and fully leverage all opportunities and advantages. With greater drive and an even more vigorous spirit, we must ensure that high-quality development advances steadily and delivers lasting progress.