(Ecns.cn) – With a turbulent 2011 coming to an end, China's theme for 2012 will be "stability," according to an economic blueprint laid out at the annual three-day Central Economic Work Conference (CEWC) held in Beijing from Dec. 12 to 14.
As the world's second-largest economy, China's growth is not only a big event for its own citizens, but also an influential factor for the global economy. Because of this, China's macroeconomic policies for the coming year will be watched by many countries, especially those that are still struggling.
Make progress while maintaining stability
The annual CEWC is known for its importance in setting the tone for China's economic policymaking for the next 12 months. The meeting is attended by members of the Political Bureau of the Communist Party of China (CPC) Central Committee, government ministers, provincial chiefs, military leaders and heads of banks and other big state-owned companies.
This year the conference was held a little late compared the past ten years. Though it was only two days behind normal schedule, the delay nevertheless caused some concern.
It implies that things have been up in the air and final decisions have not been made, according to unnamed Chinese economist, and that the government is trying to gain as much time as possible to ponder things more carefully. Moreover, it indicates that the economic situation is becoming more and more complicated in a global context.
On Dec. 5, a symposium was held between Party members and non-Party personages to discuss the current economic situation and related work for next year. President Hu Jintao announced the new guiding principle in 12 Chinese characters, which focus on steady growth, structural adjustments, improvement of people's livelihoods and social stability.
On Dec. 9, at the meeting of the Political Bureau of the CPC Central Committee chaired by President Hu, it was agreed that the country will balance efforts to ensure stable and relatively fast economic growth, while adjusting the economic structure and regulating inflationary expectations next year.
Risk of economic downturn
Due to weakening domestic demand, stronger controls on real estate and continuing sluggish exports, there has been a slight slowing down in China's real economy.
According to the latest data released by the National Bureau of Statistics (NBS), China's GDP growth was 9.7%, 9.5% and 9.1% in the first quarters, below the speed of the same period last year.
On Dec. 9, when the meeting of the Political Bureau of the CPC Central Committee was held, the NBS released China's macroeconomic statistics from November, according to which the country's consumer pricing index (CPI) eased to 4.2% from 5.5% in October, a further weakening due to falling food prices.
As China says it will continue to maintain a prudent monetary policy and a proactive fiscal policy in the near future, economists expect economic growth to fall below 9% and export growth to slow to around 10% in 2012, which implies a growing risk of an economic downturn.
Boost domestic spending
China's economy is expected to grow 9.2% in 2011 and 8.9% next year, which would be the slowest pace in more than a decade, a state-run think tank said last week. In 2012, sustainable development will be a challenge for China, especially after over 30 years of rapid economic growth.
At the meeting of the Political Bureau of the CPC Central Committee, it was reiterated that efforts to boost domestic spending, especially from consumer demand, will be a major task to achieve steady growth, and that the country will focus on increasing the incomes of people in the low and middle brackets.
As global and domestic economies may face an extreme and complicated situation next year, China should make its macroeconomic control policies more targeted, flexible and forward-looking, according to Vice Premier Li Keqiang.
Li said the country will work towards a wider coverage of social security and a more balanced distribution of income, by which the citizens will have more money to spend and thus boost domestic consumption.
