context: While the overall tone remains ‘all is well under the Party’s leadership,’ the annual top-level economic conference touched upon some of the most pressing challenges facing the economy in 2019. Determined to turn the unfavourable environment into opportunities, the state is providing the best possible top-level design, but the extent to which it can be implemented at local level remains a big question.
Central Economic Work Conference (CEWC) convened on 19-21 December 2018, with all seven Politburo standing members participating. Ahead of the upcoming 70th anniversary of the country’s establishment, the meeting discussed the following priorities for 2019
- carrying out active fiscal and robust monetary policies (note: ‘neutral’ was deleted here) while strengthening countercyclical adjustments
- on the fiscal front, larger-scale tax and fee reduction and significantly higher local government bond issuance expected
- on the monetary front, improving policy transmission and solving financing difficulties for private economy
- ‘three battles’ to focus on
- preventing aberrant oscillation in financial market and appropriately handling the local government debt problem with controllable, orderly, and moderate intensity
- poverty alleviation to emphasise such deeply impoverished regions as the ‘three districts and three prefectures’
- doubling down on environmental protection efforts while avoiding over-simplified measures
- fostering high-quality growth and supply-side structural reform
- speeding up market clearance in overcapacity industries
- improving industrial chain quality and creating new competitive advantage with technological innovation and industry clusters
- building key national lab system, enhancing SME support, emphasising IPR protection and creating innovation incentives
- forming robust domestic market
- improving product quality and developing service industries in education, early childhood care, aged care, healthcare, culture and tourism
- enhancing infrastructure investment in 5G commercialisation, AI, industrial internet, IoT, inter-city railway, logistics, and urban and rural facilities
- advancing rural revitalisation strategies
- prioritising ag and rural development, especially grain production
- adjusting ratio of grain, cash crop and feed
- cultivating family farm and cooperatives as new management actors
- integrating small peasant production into modern, upscaled ag development
- improving rural residential environment
- reforming rural land system
- fostering regional coordination
- accelerating economic institutional reform
- state-owned enterprise reform to emphasise separation of government and business as well as fair competition
- supporting private business by creating law-based environment and protect entrepreneurs’ personal and property safety
- financial institutional reform to encourage private and community banks, while urging urban commercial banks and rural credit unions to focus on their main business
- improving financial infrastructure building and enhancing regulations
- creating compliant, transparent, open, vibrant and resilient capital markets by
- improving quality of listed companies and trading system
- introducing more medium- and long-term capital
- operationalising Shanghai Stock Exchange sci-tech board
- promoting fiscal reform and disciplining local borrowing behaviour
- reducing government intervention in resource allocation
- promoting full-fledged opening up
- improving people’s livelihood
- prioritising employment stabilisation, especially that for college graduates, migrant workers and veterans
- enhancing investment in preschool education, early development of children in rural and impoverished areas and vocational education
- improving aged care system, especially in big cities
- emphasising food and drug safety, production and traffic
- deepening social insurance system reform by
- adding national pension fund coordination on top of provincial management
- covering more quality medicine under health insurance
- adopting locally specific approach to real estate sector to suppress speculation, improve market system and affordability and establish long-term mechanism