context: Heightened pressure on the economy was no longer news by Q3 2021, and this was featured even more prominently at the tone-setting Central Economic Work Conference (CEWC) for 2022. Reform of the ‘deep water zone’ in the economic structure inevitably slows growth. Coupled with supply-side fluctuations, geopolitical tension and pandemic uncertainties, threats loom over the big picture. But stability is always the unchallengeable overriding theme, which means a temporary shakeup of policy priorities would not be surprising.

The annual CEWC (Central Economic Work Conference), held 8-10 Dec 2021, discussed major policy directives for 2022. The conference readout states the economy is facing ‘threefold pressure’, namely

  • shrinking demand
  • supply shock
  • weakening outlook

But there remain key points to adhere to, including

  • high-quality growth
  • innovation-driven growth
  • supply-side structural reform
  • ‘six stablities’ and ‘six guarantees’ for basic livelihood issues and grassroots governance

In 2022, economic work should

  • put stability at the top of the agenda
  • seek growth based on stability
  • actively introduce policies conducive to economic stability
  • appropriately frontload economic support

Seven key policy directives were outlined, namely

  • stable and effective macro policies
  • micro-policies to stimulate market players
  • structural reform to smooth the economic cycle
  • scitech policies to push forward research and innovation
  • expanding reform and opening-up
  • regional policies to enhance the balance and coordination of development
  • social policy based on the safety net of people’s livelihood

The main problems to address include

  • strategic goals and practical approaches to achieve common prosperity
  • characteristics and behaviour of capital and how to manage it
  • guaranteeing primary product supply and food security
  • managing and resolving major risks
  • the route to carbon peaking and neutrality

Of note, attention was also given to the importance of the 20th Party Congress scheduled for H2 2022, a ‘major event in the political life of the Party and the state’. Accordingly, CEWC called for maintaining

  • a stable and healthy economic environment
  • a peaceful social environment
  • a clean political environment