On July 30, the Political Bureau of the Communist Party of China Central Committee held a meeting to analyze and assess the current economic situation and to set out the economic agenda for the second half.
Given the considerable external pressures and numerous unpredictable uncertainties since the start of the year, the meeting underscored the top leadership's high level of attention given to a series of urgent tasks, including stabilizing employment, enterprises, markets and expectations.
Eight major policy signals released at the meeting merit close attention.
To start with, recognizing China's composite economic advantages is critical. The meeting began by noting that China's economic fundamentals remain unchanged despite near-term headwinds. The country continues to possess multiple advantages that ensure resilience and long-term potential.
Four advantages were emphasized. First is the institutional strength of socialism with Chinese characteristics, enabling both decisive action in critical moments and sustained policy consistency.
Second is the vast domestic market, which offers space for industrial upgrading and consumption diversification. Third is the complete industrial system, capable of producing almost every type of product and providing strong supply chain support.
And last is the abundance of human resources, forming a solid base for innovation and productivity growth.
The meeting stressed that these "four-in-one" advantages form the backbone of China's development strategy. They provide the conditions for integrating domestic and international markets, which prioritize internal economic drivers while engaging in mutually beneficial global cooperation.
Second, strengthening countercyclical and cross-cyclical adjustments is key. Economic recovery remains at a delicate stage, with insufficient internal growth drivers and weak demand in the real economy, while market expectations have yet to improve.
The meeting called for stronger countercyclical measures, including policies aimed at offsetting short-term economic fluctuations and cross-cyclical measures, which seek to maintain stability over a longer horizon and prepare for future growth.
Fiscal policy should also focus on accelerating the issuance and use of special local government bonds, and channeling funds toward infrastructure and public service projects that deliver both immediate stimulus and long-term returns. The structure of central budget investments will be optimized to support innovation and industrial upgrading.
Monetary policy will remain flexible, targeted and effective. Liquidity will be kept reasonably ample, and comprehensive financing costs will be guided downward. Priority will be given to sectors such as technological innovation, green transformation and the development of micro, small and medium-sized enterprises, which are vital for employment and structural transformation.
These combined approaches aim to avoid both excessive short-term stimulus and passive reliance on market self-adjustments — striking a balance between stabilizing growth and controlling risks.
Third, expanding domestic demand and improving supply quality were prioritized. Boosting effective demand is seen as essential for sustaining recovery. The meeting stressed that expanding domestic demand must go hand-in-hand with improving supply quality, ensuring that production matches the evolving needs of households and industries.
Consumption will be supported through measures to raise household incomes and encourage spending on upgraded goods and services. Policies will promote consumption in key areas such as green products, cultural and tourism services, as well as healthcare.
Investment will focus on advanced manufacturing, strategic emerging industries and modern services, alongside the construction of new infrastructure such as 5G networks, artificial intelligence platforms and industrial internet systems. Traditional industries will be upgraded to improve efficiency and environmental protection.
The meeting also highlighted the importance of creating a unified national market by removing regional and institutional barriers, thus allowing capital, talent and technology to flow more efficiently.
This integration of demand expansion with supply-side structural reform aims to generate a virtuous cycle between demand upgrades and innovation-driven supply improvements.
Fourth, supporting the private economy was highlighted. The meeting reiterated that the private sector is an indispensable force in promoting growth, creating jobs and driving innovation. It called for a business environment that is market-oriented, law-based and international. Property rights and the legitimate interests of entrepreneurs will be protected according to the law.
Hidden market barriers will be dismantled to ensure fair competition. Private firms will be encouraged to participate in major national strategies and strengthen their roles in key industrial and supply chains. Financial institutions will be guided to develop products and services tailored to the needs of private enterprises, improving access to financing through diverse channels.
Policy guidance will support private enterprises in moving toward high-end, intelligent and green production, thereby enhancing their resilience and competitiveness in global markets.
Fifth, preventing and defusing major risks were discussed. While promoting growth, the meeting emphasized the need to prevent and manage risk in key sectors.
In real estate, policies will be refined to meet both rigid and improved housing demand while promoting the stable and healthy market development.
Local government debt risk will be addressed through comprehensive measures, including stricter budget constraints, better oversight and improved efficiency in the use of funds. In the financial sector, governance structure of small and medium-sized institutions will be strengthened, risk disposal mechanisms improved and systemic risk prevented.
Sixth, ensuring food, energy, and industrial chain security was discussed. The meeting reaffirmed that security in key areas is fundamental to stable economic performance. Food security will be ensured by protecting farmland, enhancing grain production capacity, and advancing agricultural science and technology.
Energy security will be pursued through the coordinated development of traditional and new energy sources, accelerating the construction of a new power system, and improving energy storage and peak-load regulation.
Industrial and supply chains will be reinforced by enhancing resilience, promoting domestic substitution in critical areas and preventing large-scale supply disruptions.
Seventh, advancing reform and opening-up was prioritized. Reform and opening-up remain key to China's modernization drive. In the second half, reforms will focus on fiscal and taxation systems, State-owned enterprises and the digital economy.
Opening-up efforts will deepen institutional integration in rules, regulations and standards, while strengthening connections between domestic and international markets. China will actively participate in high-standard trade agreements, shorten the negative list for foreign investment and enhance the business environment for foreign enterprises.
In addition, the Belt and Road Initiative will be advanced in synergy with domestic regional development strategies to achieve mutually reinforcing benefits.
Eighth, improving people's livelihoods and promoting common prosperity are keys. The meeting stressed that development should be people-centered, with its benefits widely shared. Efforts will focus on making public services more inclusive and balanced, particularly in education, healthcare, eldercare, housing and childcare.
Employment-first policies will expand job opportunities and improve vocational training to enhance the skills and adaptability of the workforce. Income distribution reforms will adjust excessive incomes, expand the middle-income group and improve redistribution mechanisms to narrow gaps between regions and between urban and rural areas.
The ultimate goal is to continuously enhance the sense of well-being and security among the people, and to make steady progress toward common prosperity.
The writer is a council member of the China Chief Economist Forum and head of the Guangkai Chief Industry Research Institute.
The views do not necessarily reflect those of China Daily.
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