Date
18 November 2017
A lack of consumer confidence is still a barrier for economic growth in China. Photo: Bloomberg
A lack of consumer confidence is still a barrier for economic growth in China. Photo: Bloomberg

POLICY WATCH: Outlook cloudy in 2014 as China faces challenges

China will focus on stimulating domestic spending and opening up industries to new investment as it looks ahead to another year of economic headwinds.

The agenda emerged as the Politburo, the nation’s most powerful body, gathered on Tuesday to determine the direction for the upcoming economic work conference.

Communist Party general secretary Xi Jinping {習近平} said in a statement after the meeting that the nation met its main growth targets this year and will face complex challenges and emerging opportunities. The environment for economic and social development next year is not optimistic, Xi added.

The comments came just over a week after he said reforms should be integrated into all sectors of China’s economic and social development in 2014 to help promote stable growth. At a consultation exercise with non-Communist parties, Xi highlighted the need for food security, structural industrial overhauls, balanced development among regions and livelihood improvements. He also drew attention to the need to combat air pollution and introduce a wider open-door policy.

Reform emerged as the watchword as Xi and Premier Li Keqiang {李克強} marked their first anniversary as the party’s leaders. While China’s economy looks to be stabilizing and on track for 7.5 percent growth in gross domestic product this year, deep-rooted issues persist. Factors such as the government’s role as both market players and regulators, obsolete production capacity, ineffective reform at the local government level and the lack of mass consumer confidence are still proving hurdles to sustainable growth. So much so that, according to Economic Information Daily, China might set its 2014 growth target at 7 percent, down from 7.5 percent this year.

Xi expects China to pursue steady and stable growth next year, with more effort going into broad economic and social reforms, urbanization, overhauls of public infrastructure, and improvements to agriculture and green energy. Farmland must be protected to the highest degree to ensure grain security, Xi said.

At the third plenum of the CPC Central Committee last month, the party settled on a market-driven economy as its growth model and direction for government reform. It means that the government will, for example, relinquish its role to approve a wide range of investment projects. Investment projects, except for those related to national security, environmental safety, strategic resources and vital public interests, will be determined by businesses in accordance with the law and without the need for government approval.

– Contact the reporter at [email protected]

SK

EJ Insight writer

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