CGTN: Unboxing economic policy tools: What's behind China's latest CPC leadership meeting?

BEIJING, April 26, 2025 /PRNewswire/ -- CGTN published an article on China's latest leadership meeting on the economic situation and work. Exploring the country's economic policy tools, the article highlights the strong resilience and potential of the Chinese economy. It also takes a look at the meeting's stress on enhanced efforts to accelerate the implementation of more proactive and effective macro policies, as well as boosting services consumption to strengthen the overall role of consumption in driving economic growth.

China's economy delivered a strong start in the first quarter of the year, demonstrating steady performance and resilience.

The country's GDP grew 5.4 percent year on year to 31.8758 trillion yuan (about $4.42 trillion) in Q1 2025, ranking among the highest of the world's major economies and positioning the country to better weather global uncertainties.

During a meeting held by the Political Bureau of the Communist Party of China Central Committee on Friday, the Chinese leadership analyzed and studied the current economic situation and economic work.

Noting that the country has seen its economy improve this year, with public confidence continuously boosted and solid progress made in high-quality development, the meeting called for efforts to accelerate the implementation of more proactive and effective macro policies and boost service consumption to strengthen the role of consumption in driving economic growth.

More proactive, effective macro policies

Besides the GDP, China has seen other economic indicators exceeding market expectations in the first quarter. For example, fixed-asset investment went up 4.2 percent year on year, with investment in infrastructure construction rising 5.8 percent and manufacturing investment increasing 9.1 percent.

Thanks to policy support, local-level responsiveness and the rapid buildup of innovation-driven momentum, the country's economy showcases strong resilience and potential.

China has made thorough policy preparations to address external changes, as a series of targeted macro policies have already taken effect, and more incremental policies will be introduced as needed to mitigate external shocks.

Friday's meeting called for efforts to make full use of a more proactive fiscal policy and a moderately loose monetary policy, coordinate domestic economic work and endeavors in the international economic and trade field, unswervingly manage the country's own affairs well, and keep employment, businesses, markets and expectations stable.

Luo Zhiheng, chief economist at Yuekai Securities, said efforts should be made to make good use of aggregate and structural policy tools, cut the reserve requirement ratios and interest rates when appropriate, and boost consumption and corporate investment demand.

A multi-pronged approach for struggling enterprises

To aid businesses facing challenges, the meeting urged a multi-pronged approach, including stronger financial support and accelerating integration between domestic and foreign trade development.

Stressing the need to ensure people's livelihood, it said that for enterprises that suffered relatively bigger impacts from tariffs, the proportion of unemployment insurance funds returned to enterprises to keep payrolls stable will be increased.

Amid recent U.S. tariff hikes, China's foreign trade enterprises are actively responding with innovative products, seizing orders and expanding markets.

The country has also taken swift and proactive measures to cope with tariff shocks – reaching out to broader overseas markets while bolstering domestic sales channels with upgraded products.

Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, urged the use of policies such as financial support and consumption coupon subsidies to further support foreign trade enterprises and continue to increase financial subsidies for export-to-domestic enterprises.

Boosting service consumption

Friday's meeting also highlighted the need to boost service consumption, urging a swift removal of restrictive measures in the consumption sector and proposing to introduce a re-lending facility for service consumption and elderly care.

Service consumption has gradually become a new engine of economic growth and an important area for tapping consumption potential. In the first quarter of 2025, retail sales of consumer goods, a major indicator of the country's consumption strength, gained 4.6 percent year on year.

Supported by targeted policies to boost consumption, service-related spending also picked up pace. In the first quarter, retail sales of services grew 5 percent year on year.

In addition, a series of documents to boost service consumption are implemented intensively. For instance, Chinese authorities have unveiled a work plan to boost service consumption in 2025 and released a series of new measures aimed at expanding and upgrading consumption in the domestic services sector as part of broader efforts to stimulate domestic demand.

A report released by a think tank, the China Institute for Reform and Development, forecasts that by 2030, the per capita services consumption of China's urban and rural residents could exceed 20,000 yuan, accounting for more than half of total consumption.

Services consumption has become a propeller of goods consumption, and a "goods-like services" trend is gaining momentum across the country, said Chi Fulin, head of the think tank.

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SOURCE CGTN