Full text & Analysis of the Central Economic Work Conference
Beijing focuses on consumption boost, deficit raise, and stabilising prices "in the face of increasing external pressures and growing internal challenges"
The annual Central Economic Work Conference (CEWC) was held in Beijing from Wednesday to Thursday to delineate priorities for the economic work in 2025. The following full-text translation is based on the Chinese readout from Xinhua News Agency.
A few takeaways of mine:
Debts & Tariffs
For the external environment, the CEWC readout added a noteworthy detail missing from Monday's Politburo meeting: "Adverse impacts brought about by changes in the external environment have intensified." In 2025, China's economic trajectory is expected to shift focus from 2023-2024's dual challenges of real estate and local government debt to a new addition: Trump 2.0. With proposed tariffs on Chinese goods, exports could take a hit—after a short-term rush to export ahead of tariff hikes. Meanwhile, the property market, though stabilising, still has loads of challenges ahead: ensuring supply, revving up demand, and stabilising prices. Local debt, while less prominent, still requires attention.
Domestic Demand & Policy Space
On the policy side, in addition to the traditional goals of growth, employment, price stability, and balance of payments, the CEWC readout highlighted a new focus: "boosting domestic demand, especially household consumption demand." This shift places domestic demand ahead of technological innovation in policy priority—as opposed to the 2023 readout—signalling the heightened importance of demand in the current strategy.
Also, fiscal policy has been upgraded from "proactive" to "more proactive," and monetary policy has moved from "prudent" to "moderately loose"—a stance not seen in over a decade. The last time China adopted a "moderately loose" monetary policy was in 2010, with a "prudent" stance dominating from 2011 to 2024. These changes open up greater fiscal and monetary policy space for 2025, laying the groundwork for stronger stimulus measures.
Raising the Deficit
Beijing's decision to raise the fiscal deficit marks a departure from its long-held 3% benchmark. This move aligns with Politburo directives on Monday to "strengthen extraordinary counter-cyclical adjustments."
Lian Ping, Chief Economist and Head of Guangkai Chief Industry Research Institute projects the 2025 deficit rate to range between 4% and 4.5%, equivalent to approximately 5.5 trillion yuan. While the increase is significant, Lian believes China's fiscal health remains sound. China's government debt-to-GDP ratio, at 67.5%, is far below the G20 average of 118.2%. By contrast, Japan's debt stands at 249.7%, Italy’s at 134.6%, and the U.S.’s at 118.7%. China's robust growth rate also provides a strong foundation for managing debt over the long term. Thus, while the higher deficit may prompt debate, it is widely seen as a necessary and pragmatic response to the current economic landscape.
Tackling Deflation
The CEWC explicitly addressed the challenge of persistently low prices, recognising "a reasonable rebound in prices" as a priority policy concern for 2025. The readout also emphasised the need for "striving to achieve an optimal balance of steady growth, stable employment, and a reasonable rebound in prices." This marks a pivot from 2023's cautious "do what we can" tone to a stronger call for action to boost incomes and reduce burdens on middle- and low-income groups.
Irrational market competition
China's central strategies often trigger a rush among departments and provinces, leading to duplication, excessive capacity, and oversupply—what is called "irrational competition."
The readout said, "We will address irrational market competition and regulate the behaviour of local governments and enterprises." More specifically, Beijing might need to tighten control over industrial capacity and promote mergers and acquisitions with government support to restructure struggling businesses. Additionally, local investment policies will need to be standardised to prevent harmful competition, reduce inefficiencies, and support balanced development.
A Record Number of Initiatives
The CEWC introduced seven "action plans" or "special initiatives," the highest on record. These include the "special initiative to stimulate consumption", "a special initiative to standardise enterprise-related law enforcement," and the "AI+" initiative to foster future industries. These initiatives will be characterised by high-level oversight, rapid implementation, and performance-linked incentives—not sure whether they will be temporary fixes or long-term solutions.
—Yuxuan Jia
China holds Central Economic Work Conference to make plans for 2025
The Central Economic Work Conference was held in Beijing from December 11 to 12. Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, Chinese president and chairman of the Central Military Commission, attended the conference and delivered an important speech. Members of the Standing Committee of the Political Bureau of the CPC Central Committee, including Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang, and Li Xi, also attended the conference.
In his important speech, Xi Jinping summarised the economic work of 2024, analysed the current economic situation, and laid out plans for the economic work of 2025. Li Qiang made a concluding speech, putting forward requirements for implementing the spirit of Xi's important speech and doing a good job in the economic work next year.
The conference believed that this year has been a critical year for achieving the goals and tasks outlined in the 14th Five-Year Plan. 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 people of all ethnic groups across the nation to respond calmly and adopt comprehensive measures. As a result, economic operations have remained generally stable and progressed steadily, high-quality development has advanced solidly, and the main objectives and tasks of economic and social development are on track for successful completion. New productive forces have developed steadily, reform and opening up have continued to deepen, risks in key areas have been defused in an orderly and effective manner, and people's well-being has been firmly safeguarded. China's path to modernisation has taken new and solid strides forward.
This year's development process has been extraordinary, and the achievements are highly encouraging. Notably, the decisive deployment of a package of incremental policies at the Politburo meeting on September 26 has significantly boosted social confidence and driven a notable economic recovery.
The conference pointed out that the adverse impacts brought about by changes in the external environment have intensified, and China's economic operations still face many difficulties and challenges. These include insufficient domestic demand, difficulties in production and operations for some enterprises, pressures on employment and income growth for the people, and the presence of considerable risks and hidden dangers. At the same time, it is essential to recognise that the fundamental conditions and underlying trends of China's economy—its solid foundations, abundant advantages, strong resilience, great potential, and long-term growth— remain unchanged. We must confront these challenges with determination, strengthen our confidence, and strive to transform various positive factors into tangible development outcomes.
The conference believed that through practice, we have deepened our understanding of the principles governing economic work. The centralised and unified leadership of the CPC Central Committee serves as the fundamental guarantee for successful economic work. At critical junctures and key moments, the CPC Central Committee has promptly assessed the situation and made decisions and deployments, ensuring that China's economic "ship" navigates steadily and sails forward despite the waves.
It is essential to properly balance the relationship between an efficient market and a well-functioning government, lifting restrictions on the market while ensuring effective regulation.
It is essential to coordinate the relationship between total supply and total demand, ensuring smooth national economic circulation.
It is essential to balance the cultivation of new growth drivers with the renewal of traditional drivers, fostering new quality productive forces tailored to local conditions.
It is essential to balance the optimisation of incremental growth with the revitalisation of existing resources to comprehensively improve resource allocation efficiency.
It is essential to align the pursuit of quality improvement with the expansion of total output to solidify the material foundation for the Chinese path to modernisation.
The conference stressed that next year's economic work must
follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era
fully implement the spirit 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 faithfully apply the new development philosophy on all fronts, move faster to create a new pattern of development, and promote high-quality development
further deepen reform across the board and expand high-standard opening up
build a modernised industrial system
better coordinate development and security
implement more proactive and effective macroeconomic policies, expand domestic demand
promote the integration of scientific & technological innovation and industrial innovation
stabilise the real estate and stock markets, prevent and defuse risks in key areas, and mitigate external shocks
stabilise expectations and invigorate vitality, fostering sustained economic recovery
continuously raise people's living standards, maintain social harmony and stability
ensure the high-quality achievement of the 14th Five-Year Plan targets and lay a solid foundation for a successful start to the 15th Five-Year Plan.
The conference pointed out that next year's focus should be on maintaining steady economic growth, ensuring overall stability in employment and prices, keeping the balance of payments relatively stable, and fostering synchronized growth between people's income and economic expansion.
The conference requested that we pursue progress while ensuring stability, promote stability through progress, uphold fundamental principles and break new ground, establish the new before abolishing the old, and ensure systemic integration and coordinated efforts. We will enrich and refine the policy toolbox to enhance the foresight, precision, and effectiveness of macroeconomic regulation.
We will implement a more proactive fiscal policy and raise the fiscal deficit to ensure sustained and stronger fiscal efforts. Fiscal expenditures will be intensified, with strengthened support for key areas. We will issue additional ultra-long special treasury bonds to support large-scale equipment renewals and consumer goods trade-ins and provide stronger support for major national strategies and security capacity build-up in key areas. We will increase the issuance and utilisation of local government special-purpose bonds and expand the areas and scope where they can be used as project capital. We will optimise the structure of fiscal expenditures to enhance the efficiency of fund utilisation, with a greater focus on improving livelihoods, promoting consumption, and strengthening future growth potential. We will see that, at the primary level, basic living needs are met, salaries are paid, and governments function smoothly. Party and government agencies must keep their belts tightened.
We will implement a moderately loose monetary policy. The dual functions of monetary policy tools—both quantitative and structural—will be effectively utilised. We will make timely reductions in the reserve requirement ratio and interest rates to maintain adequate liquidity and see that aggregate financing and money supply stay in step with the projected economic growth and CPI increase. We will maintain the stability of the RMB exchange rate within a reasonable and balanced range. We will explore and expand the central bank's role in macroprudential regulation and financial stability, innovate financial instruments, and ensure the stability of financial markets.
We will roll out a new batch of policies, emphasising better coordination among fiscal, monetary, employment, industrial, regional, trade, and environmental regulation policies, as well as reform and opening-up initiatives. We will improve mechanisms for effective communication, consultation, and feedback among departments to enhance the synergy of policy implementation. We will ensure that economic and non-economic policies are both included in the evaluation of the consistency of macro policy orientation to coordinate the entire process of policy formulation and implementation and enhance overall policy effectiveness.
The conference decided the following key tasks for next year:
1. Vigorously boosting consumption, enhancing investment efficiency, and expanding domestic demand on all fronts.
We will launch a special initiative to stimulate consumption, focusing on increasing incomes and reducing burdens for middle- and low-income groups to enhance their consumption capacity, willingness, and quality. Basic pensions for retirees will be appropriately increased, along with the urban and rural residents' basic pensions and government subsidies for urban and rural residents' medical insurance.
We will intensify and expand large-scale equipment renewals and consumer goods trade-ins, promoting innovative and diversified consumption scenarios, expanding service consumption, and supporting the development of the cultural and tourism industries. Proactive efforts will be made to foster the debut economy, ice and snow economy, and silver economy.
We will provide stronger support for major national strategies and security capacity build-up in key areas by strengthening top-down coordination. We will moderately increase central budgetary investments and strengthen coordination between fiscal measures and financial markets to leverage government investment in driving private investment effectively.
Planning for major projects under the 15th Five-Year Plan will commence early.
Urban renewal will be actively promoted, and a special initiative will be launched to reduce overall logistics costs across society.
2. Driving the development of high-quality productive forces through technological innovation and building a modernised industrial system.
We will strengthen fundamental research and tackle critical core technologies, proactively plan major science and technology projects in advance, and launch large-scale demonstration actions for new technologies, products, and scenarios.
We will launch an "AI+" initiative to foster future industries, and we will strengthen the national strategic science and technology capacity.
We will improve the multi-level financial service system and make greater efforts to foster patient capital and attract private capital for venture investment, fostering a gradient of innovative enterprises.
We will address irrational market competition and regulate the behaviour of local governments and enterprises.
We will actively utilise digital and green technologies to transform and upgrade traditional industries.
3. Leveraging the pivotal role of economic system reforms to advance the implementation and effectiveness of key reform initiatives.
We will ensure the high-quality completion of the initiative to deepen state-owned enterprise reforms and introduce a private economy promotion law.
We will implement a special initiative to standardise enterprise-related law enforcement.
We will formulate guidelines for establishing a unified national market.
Fiscal and tax system reforms will be advanced in a coordinated manner, and local governments will be given more financial resources.
We will deepen comprehensive reforms in stock market financing and investment mechanisms, addressing bottlenecks and barriers to the entry of medium- and long-term funds into the market. This will enhance the inclusiveness and adaptability of the stock market system.
4. Expanding high-standard opening up and stabilising foreign trade and foreign investment
We will advance voluntary and unilateral opening up in an orderly manner and steadily enhance institutional opening up.
We will enhance the quality and efficiency of pilot free trade zones while broadening their reform leeway. The implementation of core policies for the Hainan Free Trade Port will be accelerated.
We will make active efforts to develop service trade, green trade, and digital trade.
We will deepen reforms in mechanisms for promoting foreign investment
We will steadily advance the opening up of the service sector, with pilot programmes in sectors such as telecommunications, healthcare, and education, while continuing to strengthen the "Invest in China" brand.
We will strive for solid progress in high-quality Belt and Road cooperation and improve the overseas service system.
5. Effectively preventing and defusing risks in key areas and firmly upholding the bottom line of preventing systemic risks.
We will implement sustained measures to stabilise the real estate market, halt its decline, and foster recovery, with a heightened focus on renovating urban villages and dilapidated housing, fully unlocking the essential demand for a home to live in and for better housing.
The supply of new land for real estate development will be reasonably controlled, while unsold land and commercial properties will be revitalised. Work on addressing unsold inventory in the real estate market will be advanced.
We will promote a new development model for the real estate sector and build its foundational systems in an orderly manner.
We will manage risks in local small and medium-sized financial institutions with prudence. Central and local governments will coordinate to combat illegal financial activities with joint efforts.
6. Advancing new urbanisation and comprehensive rural revitalization in a coordinated way and promoting integrated urban-rural development.
We will ensure that the total area of China's farmland remains above the specified red line, and we will refine the system for offsetting cultivated land that has been put to other uses.
Efforts will focus on stabilising grain and essential agricultural product supply and improving agricultural efficiency and competitiveness.
We will actively support the enthusiasm of grain farmers and key grain-producing regions and refine the grain pricing mechanism.
We will implement locally tailored strategies to promote the integrated development of prosperous industries, strong counties, and affluent populations, taking all possible measures to broaden income-generating opportunities for farmers.
We will advance the development of modern metropolitan areas, enhance governance capacity in megacities and super-large cities, and vigorously promote the growth of county-level economies.
7. Strengthening regional development strategies and enhancing regional development vitality.
We will leverage the combined effects of the coordinated regional development strategy, major regional strategies, and the functional zoning strategy to actively cultivate new growth drivers.
Efforts will be made to enhance the innovation capacity and spillover effects of economically advantaged regions.
Economic powerhouse provinces will be encouraged to take the lead, while other regions will be supported in adopting locally tailored approaches and showcasing their strengths.
We will work to deepen industrial collaboration among eastern, central, western, and northeastern regions, while vigorously promoting the marine economy and bay area economy.
8. Cutting carbon emissions, reducing pollution, pursuing green development, and boosting economic growth in coordination, accelerating economic and social development and a comprehensive green transition.
We will further deepen reforms in the ecological civilisation system, fostering an ecology conducive to the healthy development of green and low-carbon industries and cultivating new growth drivers such as green buildings.
We will push for significant progress in the three landmark projects for the shelterbelt program in northwest, north, and northeast China. The construction of renewable energy bases in deserts, gobi areas, and wastelands will be expedited.
We will establish a batch of zero-carbon industrial parks, advance the construction of a national carbon market, and develop systems for product carbon footprint management and carbon labelling certification.
We will intensify efforts to keep the skies blue, waters clear, and lands clean. The disaster prevention and mitigation system will also be strengthened. We will formulate a comprehensive action plan for solid waste management and implement major biodiversity conservation projects.
We will strengthen the disaster prevention and mitigation system.
9. Placing greater emphasis on ensuring and improving the people's well-being and giving the people a growing sense of fulfilment, happiness, and security.
We will launch targeted employment support plans for key areas, key industries, urban and rural communities, and small and micro enterprises to promote employment among priority groups. Measures will be strengthened to protect the rights and interests of workers in flexible employment and new employment forms.
Policies supporting industries and employment will be effectively implemented to prevent large-scale poverty or relapse into poverty, ensuring the basic livelihood of vulnerable groups.
We will promote balanced and high-quality development of compulsory education and steadily expand high-quality undergraduate education.
We will launch a project that strengthens the foundations of the healthcare system [translator's note: likely referring to community-based health facilities and services] and formulate policies that encourage childbirth.
We will promote community-supported home-based elderly care and expand universal elderly care services.
We will apply and further develop the Fengqiao model and strengthen the public safety governance system.
The conference pointed out that
We must consciously align thoughts, will, and actions with the CPC Central Committee's scientific judgment of the situation. This involves both grasping the overall trend with confidence and recognising challenges with clear-headedness. We must fully implement the overall requirements and policy orientations for next year's economic work, guided by clear goals and striving to achieve an optimal balance of steady growth, stable employment, and a reasonable rebound in prices. We must align with policy orientations, ensure precise timing and intensity, and act as early as possible on all tasks, maintaining sufficient force. We must reinforce systematic thinking, with a focus on coordinating various policies and reform and opening up initiatives to amplify policy effectiveness.
We must maintain a strong focus on key priorities to successfully accomplish next year's major economic tasks. To address the pronounced issue of insufficient demand, efforts must focus on boosting domestic demand, especially household consumption demand. For deep-seated barriers to development and external challenges, we must continue to deepen reform and expand opening up with unwavering determination. We must ensure a smooth transition from old to new growth drivers by targeting bottlenecks in industrial transformation and upgrading. To respond to business concerns, policy support should be strengthened, and regulatory services optimized. For risks and hidden dangers in key areas, persistent efforts must be made to advance risk management and resolution.
We must place a stronger emphasis on improving implementation efficiency and fully mobilise the enthusiasm, initiative, and creativity at the grassroots level, continuously improving the business environment and fostering greater synergy to drive high-quality development.
The conference stressed that
It is essential to strengthen the Party's leadership over economic work, adopt a proactive approach, boost confidence, confront challenges head-on, and strive for proactive achievements to ensure the full implementation of the CPC Central Committee’s decisions and directives.
It is essential to enhance positive incentives and foster motivation for action and innovation. Efforts must be made to relieve burdens at the grassroots level, enabling capable and motivated cadres to take initiative and deliver tangible results.
We must continue unwavering efforts to combat corruption, maintaining a fair and just market environment and a clean and wholesome business environment.
A strong commitment to facts and truths must be upheld, with firm opposition to pointless formalities and bureaucratic practices that focus on impressing higher authorities while neglecting responsibilities to lower levels and disregarding the timeliness of policy implementation.
We must coordinate development and security, ensure production safety, strengthen coordination and synergy, oppose departmentalism, and foster unified efforts to guarantee effective implementation.
Expectations management should be enhanced by aligning and coordinating policy implementation with expectations guidance to improve the influence and effectiveness of policies.
At the same time, it is crucial to accurately understand global, national, Party, and societal dynamics, strengthen strategic planning, and develop recommendations for the 15th Five-Year Plan.
The conference requested ensuring people's well-being and maintaining safety and stability during the transition from the end of the year to the beginning of the next. Comprehensive and thorough efforts should be made to identify and resolve various conflicts, disputes, and risks to ensure overall social stability.
The conference called on the entire Party, the whole nation, and all of society to rally more closely around the CPC Central Committee with Comrade Xi Jinping at its core, diligently implement the conference's decisions, and fully accomplish economic and social development goals and tasks. By achieving tangible outcomes through high-quality development, we will comprehensively advance the building of a great country and the great rejuvenation of the Chinese nation.
Members of the Political Bureau of the CPC Central Committee, secretaries of the Secretariat of the CPC Central Committee, leaders of the Standing Committee of the National People's Congress, state councillors, president of the Supreme People's Court, procurator-general of the Supreme People's Procuratorate, relevant leaders of the National Committee of the Chinese People's Political Consultative Conference, members of the Central Military Commission, and others attended the conference.
Also present at the meeting were leading officials of provinces, autonomous regions, municipalities directly under the central government, municipalities with independent budgetary status, and the Xinjiang Production and Construction Corps, as well as leading officials from relevant central Party and government departments, people's organizations, some financial institutions and enterprises under central management, and the relevant departments of the Central Military Commission.