Maintaining stability will be China’s top economic policy goal in 2021

China’s top economic policymakers gath-ered last week (Dec. 16–18) for Beijing’s economic work conference to decide Chinese economic policy priorities for 2021 and set relevant targets as China enters its 14th five-year plan. The key message was essentially the same as from last year’s con-ference (BOFIT Weekly 51/2019). Rather than any major adjustments in the economic policy framework, the stress will re-main on continuity and stability.

Even if the 2021 GDP growth target has yet to be announced, media sources suggest a target of around 8 % p.a. Approval of the target will take place at the National People’s Congress which is normally held in March. The 8 % target also comports with international forecasts, as given this year’s exceptionally low basis reference, on-year GDP growth next year should be brisk. Monetary targets include keeping the debt-to-GDP ratio stable, which means that the government will try to rein in growth in indebtedness by keeping debt growth at the same level as nominal GDP growth. In addition, interest rate reforms will be deepened, bank capital will be reinforced and funding of technological innovation will improve.

The work conference identified eight main policy emphases for next year that align both with the coming five-year plan and China’s longer-term goals. The emphases are: strengthening technological innovation in strategic fields; enhancing production chains; bolstering domestic demand though e.g. higher employment; reforms and opening up of the economy; improving food supply chains; increasing competition; as well as tackling housing issues in big cities by e.g. increasing pro-duction of affordable housing and improving renter protections. The final emphasis will be on climate emissions, including formulating an action plan to assure China’s carbon dioxide emissions peak by 2030.