Chinese leaders wrap up annual economic planning meeting with scant details on revving up growth

China's state media say top leaders held an annual planning meeting where they agreed to step up spending to help rev up the economy

China Economy (Copyright 2023 The Associated Press. All rights reserved)

Chinese leaders agreed at an annual planning meeting to step up spending to help rev up the world's second-largest economy, state media reported Friday, without giving details of any policy changes.

The official Xinhua News Agency said leader Xi Jinping chaired the meeting aimed at boosting growth, defusing risks and ensuring stability. The report cited that the meeting concluded “the proactive fiscal policy should be appropriately intensified and improved in quality and efficiency."

Recent estimates suggest the Chinese economy has expanded this year at about a 5% annual rate, in line with the government’s target. But the recovery after stringent coronavirus pandemic restrictions were lifted was short-lived, and the economy is forecast to slow next year.

The ruling Communist Party's capacity to steer the economy through challenging times has broad implications for regional and global growth. Earlier this week, the government reported that exports rose in November, for the first time since April and said demand may be picking up after months of decline.

But some economists said they doubted the rise, fueled mainly by exports of vehicles and ships and by the holiday shipping rush, would continue for long.

The report gave few specifics on how China's leadership plans to handle fast mounting debts and resolve a crisis in the vital property sector after defaults by dozens of developers. But it did say China needs to “prevent and defuse risks in key areas and resolutely safeguard the bottom line against systemic risks.”

Earlier this week, Moody’s Investor Service downgraded China’s sovereign debt rating as the country’s real estate crisis seeps into local governments and private financing. It also downgraded ratings for a number of Chinese banks and insurance companies.

The Xinhua report said the planning meeting also reaffirmed longstanding efforts to increase demand from Chinese businesses and consumers, part of an effort to rely less heavily on investment in construction and on export manufacturing.

China's economy has been strained by the downturn in the property industry, usually a strong source of demand for many industries. A crackdown on excessive borrowing by real estate developers has left many unable to pay huge debts, and local governments that depend on property deals without a key source of revenue.

Before the economic conference, the Xinhua report said the party’s powerful Politburo reviewed anti-corruption work, a perennial issue for the ruling Communist Party, and said that “efforts should be made to tighten political oversight" in the fight against corruption.

It said the party's plenum, another key meeting, was scheduled for Jan. 8-10 next year.