A light rail train crosses the city of Wuhu, East China's Anhui Province, on July 17, 2024. Photo: VCG

 

China's economy is on track for stable growth, with strong policies and reforms needed for a sustainable economic recovery, a Chinese official said following a key meeting to draw up the next blueprint for China's economy.

Han Wenxiu, executive deputy director of the Office of the Central Committee for Financial and Economic Affairs, made the remarks at a press conference on Friday, providing an overview on the guiding principles from the third plenary session of the 20th Communist Party of China (CPC) Central Committee.

Analysts believe that reform measures adopted during the plenum will provide a boost to China's economic growth and instill confidence in the market. They anticipate that policy measures aimed at stimulating domestic demand and promoting the development of new quality productive forces will be implemented.

China's economy is currently showing signs of stable and healthy development, with key macroeconomic indicators meeting market expectations. However, there are still challenges such as insufficient effective demand, difficulties in business operations for some companies, and financial challenges for certain pockets of the country, which required targeted policy effort and reforms, Han said.

The remarks came after the plenum emphasized the unwavering commitment to achieving the 2024 social-economic development goals and responded to questions of a "temperature difference" between China's booming macro data and experiences of individual businesses and industries in the Chinese economy.

During the press conference, Han highlighted the importance of ensuring the stable and healthy growth of the real estate market, promoting the rapid development of emerging and future industries, boosting domestic demand and stabilizing employment, in boosting the sustained growth of Chinese economy.

There is still considerable room for high-quality development in China's real estate sector as China's new urbanization advances. Efforts will be made to ensure delivery of homes, eliminate modes of excessive debt, high turnover, and high leverage, while better meeting the needs of genuine homebuyers, Han said.

Efforts should also be made to cultivate and strengthen emerging industries and establish investment mechanisms for emerging industries, as highlighted by the third plenum, Han said.

Han also emphasized on expanding domestic demand, particularly consumer spending, leveraging the advantages of China's large-scale market to boost consumption and investment.

The Chinese government has expressed a willingness to proactively boost domestic demand. We expect that efforts will be made to put in place stimulus policies aimed at expanding domestic demand, improve employment environment and maintain stable growth, Darius Tang, associate director of Corporates, Fitch Bohua, told the Global Times in a statement on Friday.

New quality productive forces driven by artificial intelligence, biomedicine, and advanced manufacturing will continue to facilitate the successful transformation and upgrading of China's economic structure, Tang said.

Efforts will be made to build a unified national market, including the development of a unified urban-rural construction land market, a nationwide integrated technology and data market, and a unified national electricity market, Han added

China will also make institutional improvements to facilitate high-quality and full employment, and enhance the development of the aged care industry.

"We expect that China will increase investment in the fields of education, healthcare and pension that are directly linked to people's livelihoods and well-being, boost consumer confidence and convert current excessive household savings into new forms of consumption," Tang said.

The third plenum has adopted a resolution which puts forward more than 300 important reform measures, all of which involve reforms on the levels of systems, mechanisms, and institutions.

The third plenum has provided a boost and confidence for China's modernization goals. The emphasis on promoting market vitality and establishing a unified national market, as well as prioritizing the well-being of the people, will likely lead to new growth opportunities and measures to promote the wellbeing of the people, He Weiwen, a senior fellow from the Center for China and Globalization, told the Global Times on Friday.

"The reforms outlined in the third plenum are both forward-thinking and practical, and are expected to have a positive impact on the economy in the second half of the year," He said.

China's GDP expanded 5 percent to reach 61.68 trillion yuan ($8.49 trillion) in the first half of 2024, data from the National Bureau of Statistics showed, demonstrating the resilience and innate strength of the world's second-largest economy.