车讯:涉69辆 宝马召回部分118i/X5等多款车型

Editor's note: The fourth plenary session of the 20th Communist Party of China (CPC) Central Committee will be held in Beijing in October, a decision made at the CPC Central Committee Political Bureau meeting on July 30. To mark that, CGTN has launched a new series, "China's economy: A new chapter unfolds." This is the sixth article in the series, focusing on longer-term development goals. Yi He, a special commentator on current affairs for CGTN, is the chief macroeconomist of Huatai Securities. The article reflects the author's views and not necessarily those of CGTN.

The Communist Party of China (CPC) has outlined the short-term focus and medium-to-long term goals to boost domestic demand and the overall resilience of the economy with a variety of policy tools. In the face of continued global geopolitical and economic uncertainties, it is crucial to maintain stability, reduce vulnerability, and stay on track for the longer-term development goals. The 15th Five-Year-Plan (2026-2030) will be a prime agenda of the fourth plenary session of the 20th CPC Central Committee in October.

The statement issued after the meeting of the CPC Central Committee Political Bureau on July 30, that outlined the goals, has several notable points.

The current macro environment has become more optimistic compared with the situation at the time of the April meeting. The Political Bureau press release stated that the main economic indicators have performed well, new quality productive forces continue to thrive and "the Chinese economy has proven to be vibrant and resilient."

In April, although recognizing "signs of improvement and strengthening confidence," the Political Bureau expressed concerns over the "growing impact of external shocks" and vowed to prepare for external volatilities.

China has gone through a roller-coaster ride since April, thanks to the U.S. announcing a flurry of tariffs. The highest effective tariff rate surpassed 100 percent at the time of the April meeting. However, China's export growth remained in positive territory, showing remarkable resilience. High-frequency data also pointed to a pick-up in July export growth over June.

Following the tariff de-escalation in May and China-U.S. trade dialogue, the concerns over outsized external shocks subsided. The economic performance "scorecard" in the first half of 2025 showed a 5.3 percent GDP growth year on year, on track to reach the five percent growth target set for 2025. This was re-emphasized in the Political Bureau statement.

Demand side policies continued to focus on boosting domestic demand growth, while concerns over external demand volatilities subsided. The July meeting decided on more accommodative fiscal policy, faster-issuance government bonds and deployment of fiscal funds as well as a reasonably loose monetary policy to ensure ample liquidity and further reduction in overall funding cost for the real economy. However, since there was no mention of interest and reserve requirement rate cuts, monetary expansion is perceived to be more moderate, since the interest rate has already reached relatively low absolute levels, and banks' net interest margins remain under pressure.

On the fiscal side, both central and local government expenditure growth has picked up notably, reaching 8.9 percent year-on-year growth in the first half of 2025, compared with -2.8 percent in the same period last year. This contributed to the pick-up in domestic demand growth.

It is expected that the fiscal policy will continue to support growth in the second half of the year, albeit with more diversified policy tools, to replenish local government funds, as recently indicated by the National Development and Reform Commission of China.

Further policy support can be expected to boost consumption growth, especially service consumption. The meeting also voiced strong support for capital market development and urban upgrade.

The July meeting statement shows a clear shift toward promoting consumption as the main growth driver this year. While the subsidy program since the fourth quarter of 2024 has visibly lifted large-item consumption such as home appliances and automobiles, the focus in the second half of 2025 is likely to rotate toward service consumption. Measures to promote service consumption demand may include building both the hardware (infrastructure) and software (products) to facilitate service demand, further improving the social security network, and targeted support such as childcare subsidies.

Regarding capital market development, "openness and inclusiveness" have been added to the policy objectives, which is an encouraging sign. While there are some expectations built around property market policies, the meeting reconfirmed the resolve towards a new development path for China's property sector, with a greater focus on the quality of (urban) life. Hence the statement mentions "high-quality urban upgrade" but there is no direct mention of property market policies.

Anti-involution has become a new area of policy focus, with preference toward market-oriented measures. Various industrial sectors have rolled out their own versions of the anti-involution policy to curtail loss-making competition. They include industries such as automobile, lithium battery production and coal mining. Therefore, the statement against "disorderly competition" was largely expected. It reconfirmed the policy emphasis on restraining over-expansion of capacity in targeted sectors, while reducing disinflationary pressure and improving the cash flow of the manufacturing sector.

Last but not least, there is a continued strong resolve for longer-term development goals. The statement said the fourth plenum will focus on the 15th Five-Year-Plan, confirming the emphasis on economic development in the face of external uncertainties. In 2015, China set the goal of doubling real per capita income by 2035, indicating 4.5-5 percent per annum growth for the next 10 years, which is an achievable but challenging goal. Therefore, China will continue to expand domestic demand with an emphasis on boosting consumption, investing in people, and upgrading manufacturing capabilities.

Looking ahead, the 15th Five-Year-Plan will likely maintain continuity of the policy guidelines. This will include continued modernization, reform and opening up, enhancing the rule of law, and pursuing high-quality growth.

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