CPC Politburo Meeting Sets Tone: Implement Active Fiscal and Moderately Loose Monetary Policies to Boost Domestic Demand in H2

The Political Bureau of the Central Committee of the Communist Party of China convened a meeting on Thursday (30th), chaired by General Secretary Xi Jinping. It was decided that the Fifth Plenary Session of the 20th Central Committee of the Communist Party of China (the Fifth Plenum) will be held in Beijing in October 2024. The main agenda includes the Political Bureau reporting its work to the Central Committee and focusing on studying major issues related to the sustained advancement of 'comprehensively and strictly governing the Party'.

According to the official media Xinhua News Agency, the meeting acknowledged that since the 18th Party Congress, governance within the Party has achieved results. However, with changes in national conditions, it remains necessary to strategically address new situations and prominent issues in Party governance.

Regarding economic conditions, the meeting observed that China's economy has shown a development trend of renewed momentum and improved structure since the beginning of the year. Nevertheless, it emphasized the need to pay high attention to difficulties and challenges in economic operations. For the second half of the year, the meeting stressed adhering to the principle of 'seeking progress while maintaining stability' and implementing 'more active fiscal policies' and 'moderately loose monetary policies'.

Specific measures include accelerating the pace of fiscal spending and the utilization of bond funds, vigorously advancing the 'Two Major' initiatives (implementation of major strategies and strengthening security capabilities in key areas) and the 'Two New' initiatives (large-scale equipment upgrades and consumer goods trade-in programs).

Additionally, the meeting laid out plans for industrial upgrading and expanding domestic demand. Authorities are required to deeply implement the 'AI+' initiative, develop new forms of intelligent economy, and promote the transformation and upgrading of traditional industries.

On market environment, the meeting proposed formulating regulations for building a unified national market, continuously rectifying 'involution-style' competition, and routinely resolving overdue payments to enterprises. Regarding livelihood protection, the meeting called for increased employment support for key groups and better protection of rights for flexible workers and those in new forms of employment.

On risk prevention, the meeting reiterated the need to 'stabilize the real estate market', implement a comprehensive debt resolution package, and advance reforms to defuse risks in local small and medium-sized financial institutions. In response, Yan Yuejin, Deputy Director of the Shanghai E-House Real Estate Research Institute, analyzed that the meeting sent dual signals of improving the quality of existing policies and strengthening new measures. He expects fiscal efforts to align closely with the real estate sector, with various supporting funds likely to be accelerated in the second half of the year.

Li Yujia, Chief Researcher at the Housing Policy Research Center of the Guangdong Urban Planning Institute, believes the official approach to risk prevention has shifted to focus on both supply and demand sides. By constructing 'good houses' and addressing infrastructure shortfalls, the use value of real estate can be restored and market expectations stabilized. Finally, the meeting urged leading officials at all levels to establish correct performance views and continuously create new achievements in high-quality development.