Keep calm and carry on

For the second year in a row, the Central Economic Work Conference (CEWC) identified weak demand as the biggest challenge facing China’s economy.

Some context: The two-day CEWC – the annual forum in which Party officials set the economic agenda for the year ahead – wrapped up Thursday.

According to the meeting readout, the main challenges facing the economy are:

• Insufficient domestic demand
• Production difficulties at some enterprises
• Pressure on employment and household income growth
• Risks and hidden dangers

Fun fact: The list is mostly the same as last year, although the phrasing has been tweaked a little.

• In 2023, the CEWC was concerned with “overcapacity,” not production difficulties.
• Last year’s worries about “weak expectations” among the public have narrowed to focus on household income.
• Concerns about the uncertain international environment have dropped off the list entirely – though that hardly means officials are not worried about the global economic and geological environments.

But despite the risks, top officials remain confident in the overall economic trajectory, noting that:

• “China’s economic foundation is stable, with many advantages, strong resilience, and great potential.”

Among the long list of goals for next year, the CEWC included:

• Expanding domestic demand, especially household consumption
• Stabilizing the property and stock markets
• Stabilizing expectations
• Promoting the sustained recovery of the economy

Get smart: Beijing’s failure to fix insufficient domestic demand since the last CEWC doesn’t inspire confidence.

• Still, concrete signaling that authorities intend to ramp up fiscal and monetary policy support suggests they might finally be about to address the issue head on.