China's Economic Stimulus on the Horizon? "Domestic Demand Insufficient"

by Oh Kuemin

Published 28 Apr.2023 18:21(KST)

"Science and Technology Must Establish a Foundation for Self-Reliance and Self-Strengthening"

China's leadership has argued that domestic demand in its economy is still insufficient, necessitating the strengthening of proactive fiscal policies.

On the 28th, China's state-run news agency Xinhua reported that the Central Political Bureau of the Communist Party of China, chaired by President Xi Jinping, held a meeting and made this assessment of the current economic situation in China.

[Image source=Yonhap News]

The Central Political Bureau stated that China's economic operations started smoothly this year, saying, "We have achieved a decisive victory in the COVID-19 prevention and control situation, leading to an overall recovery of the economy and society, and recorded better-than-expected economic growth." However, it emphasized that demand remains insufficient and that "new resistance is being faced."

They stressed that the recovery and expansion of demand are necessary for sustained economic development, arguing that "proactive fiscal policies should be strengthened to improve efficiency, and a moderate monetary policy should be accurately implemented."

Specifically, they proposed measures such as raising residents' incomes, improving the consumption environment, promoting service consumption, and encouraging private investment through government investment and incentives. Additionally, goals were set for the stable development of the real estate market and stabilization of the employment market.

They also emphasized the need for domestic self-sufficiency and self-reliance in technology and equipment development to break free from the U.S. decoupling containment strategy. However, they noted that attracting foreign investment remains important and that free trade pilot zones should take the lead in reform and opening-up.