Questions and Answers: China's Central Economic Work Conference 2024

The Central Economic Work Conference held on December 11-12 has attracted much attention from all walks of life. The relevant responsible comrades of the Central Finance Office were interviewed by Xinhua News Agency and other media as soon as possible after the meeting, in-depth interpretation of the spirit of the 2024 Central Economic Work Conference, and response to current economic hot issues.

Q: How do you evaluate the economic work in 2024 and how do you see the current economic situation?

Answer: The Central Economic Work Conference summed up this year's economic work. In particular, the meeting of the Political Bureau of the CPC Central Committee on September 26 decisively deployed a package of incremental policies, which effectively boosted social confidence and significantly rebounded the economy. We believe that judging from the current economic operation, it is expected that the annual economic growth will be about 5%, and China is still an important engine of world economic growth. New quality productivity has developed steadily, scientific and technological innovation represented by integrated circuits, artificial intelligence, and quantum technology has made important progress, the intelligent transformation and digital transformation of traditional industries have continued to advance, and the pace of green and low-carbon transformation has accelerated. Reform and opening up continue to deepen, and major reform measures such as delaying the retirement age and building a unified national market are being rolled out at an accelerated pace. High-quality Belt and Road cooperation has been steadily promoted, and high-level opening-up has achieved positive results. Risk mitigation in key areas is orderly and effective. In October and November, the transaction volume of commercial housing in the country increased year-on-year and month-on-month for two consecutive months; Actively resolve the risk of local government debt, and steadily promote the reform of local small and medium-sized financial institutions to reduce risks. People's livelihood has been solidly guaranteed, employment has remained stable, and the achievements in poverty alleviation have been consolidated.

While seeing the achievements, the meeting also pointed out that the adverse effects brought about by the current changes in the external environment have deepened, and China's economic operation is still facing many difficulties and challenges, mainly due to the lack of domestic demand, the difficulties in the production and operation of some enterprises, the pressure on the employment and income of the masses, and the risks and hidden dangers. It should be noted that these are problems that are moving forward and can be resolved in the course of development. General Secretary Xi Jinping has repeatedly stressed that as long as confidence does not slip, there are always more ways than difficulties.

China's economic foundation is stable, with many advantages, strong resilience and great potential, and the supporting conditions and basic trends for long-term improvement have not changed. The foundation is stable, mainly because the chassis of economic development is stable. China is a super-large-scale economy, with huge economic volume, market capacity and industrial supporting capacity, and the internal economy and export-oriented economy can achieve a dual cycle of benign interaction, which is an important guarantee for the steady and far-reaching development of China's economy. The many advantages are mainly due to the advantages of scale, market, talent, and innovation common to China's existing economies of large countries, as well as the party's leadership and the unique institutional advantages of the socialist market economic system, which determine where China's economy has the advantages of relatively strong comprehensive national strength and international competitiveness. Strong resilience is mainly due to the complete industrial system of China's enterprises, the variety of business entities, and the strong ability to adapt to environmental changes. China's residents have a high savings rate and a relatively strong ability to adapt to economic fluctuations. This is the root cause of China's strong ability to resist risks. The main reason for the great potential is that China is still a developing country, and its development is unbalanced and insufficient, which is where China's potential and motivation lie for having greater space for development.

Question: What are the considerations for implementing more active and promising macroeconomic policies next year, such as fiscal policy and monetary policy?

A: Next year will be the first time that we will implement a "more active fiscal policy" and change the "prudent monetary policy" that has been in place for 14 consecutive years to a "moderately loose monetary policy."

We understand that the tone of macroeconomic regulation and control has undergone major changes, mainly considering that the adverse impact of changes in the current external environment may be deepened, and the domestic economic operation is still facing many challenges.

Fiscal policy and monetary policy are the two major policy tools for macroeconomic regulation and control, and more pragmatic measures should be taken next year.

In terms of policy intensity, we will increase the fiscal deficit ratio, increase the issuance of ultra-long-term special treasury bonds and local government special bonds, and increase the intensity of fiscal expenditure, so as to ensure a strong impetus to economic growth. In terms of policy focus, we will optimize the structure of fiscal expenditure, expand the scope of special bonds to be invested and used as project capital, make good use of the transfer payment policy, and strengthen the bottom line of the "three guarantees" at the grassroots level. At the same time, we will promote the reform of the fiscal and taxation system, and strive for new breakthroughs in the reform of zero-based budgeting and the backward transfer of the collection of consumption tax on some items.

The implementation of a moderately loose monetary policy will further give full play to the dual functions of monetary policy tools, both in aggregate and in structure, and promote the faster and more flow of funds to the real economy. We should cut the RRR and interest rates in a timely manner to maintain abundant liquidity, so that the scale of social financing and the growth of money supply can match the expected targets of economic growth and overall price levels. Maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Explore and expand the central bank's macro-prudential and financial stability functions, innovate financial instruments, and maintain the stability of the financial market.

Next year, we must adhere to system integration, coordination and cooperation, and play a strong and effective policy "combination punch". It is necessary to enhance the consistency of macroeconomic policy orientation, and strengthen coordination and cooperation between macroeconomic and micro policies, fiscal and monetary policies, economic policies and non-economic policies, so as to avoid policy "fights". Central departments and local governments should strengthen their awareness of the overall situation, oppose standardism, form a linkage between the upper and lower levels, and improve the overall effectiveness of policies. In addition, it is important to take into account the present and the long term. It not only focuses on solving short-term problems, including stabilizing the property market and stock market, stabilizing expectations, stimulating vitality, and stabilizing economic growth; It also focuses on long-term development, fully unleashes development potential through deepening reform, and enhances the endogenous driving force of development. One of the nine key tasks deployed at the meeting is to give full play to the leading role of economic system reform, promote the implementation of landmark reform measures, and effectively break down the deep-seated obstacles restricting development.

Q: The meeting proposed to vigorously boost consumption, improve investment efficiency, and expand domestic demand in an all-round way.

Answer: Expanding domestic demand is a strategic move, and boosting consumption is the top priority. With regard to vigorously boosting consumption, a special action to boost consumption will be implemented next year, with the focus on closely combining the promotion of consumption with the benefit of the people's livelihood.

We believe that, on the one hand, efforts should be made to enhance consumption capacity and enhance consumption willingness. Next year, we will promote the steady growth of residents' income by increasing direct financial investment in terminal consumption and improving the level of social security. For example, promoting the employment of key groups; Improve the mechanism for the normal increase of workers' wages, and accelerate the construction of a skill-oriented salary distribution system; Appropriately raise the basic pension of retirees, raise the basic pension of urban and rural residents, raise the standard of financial subsidies for medical insurance for urban and rural residents, formulate policies to promote childbirth, and focus on stabilizing the property market and stock market, etc., to increase residents' income through multiple channels. At the same time, we will continue to optimize policies to promote consumption, improve relevant systems, and improve the consumption environment. The society has generally reflected that the "two new" policies have achieved very good results this year. Next year, we will step up efforts to expand the scope, allocate more funds, include more consumer goods in the scope of support, and optimize the subsidy distribution process.

On the other hand, it is necessary to make a fuss about adapting to changes in the consumption structure and enhancing the adaptability of supply and demand. It is necessary to speed up the improvement of relevant support policies, encourage all kinds of business entities to provide diversified services, and strive to meet the consumption needs of residents in health, elderly care, child care, housekeeping, etc. It is necessary to vigorously cultivate new types of consumption such as culture, tourism, sports, performances, and digital. It is necessary to actively develop more diversified consumption scenarios, and actively develop the first economy, ice and snow economy, and silver economy. It is necessary to make full use of new technologies such as virtual reality and artificial intelligence, and continue to vigorously cultivate new integrated consumption formats with the characteristics of innovation and cross-border.

As an important part of domestic demand, China's investment space is still very large. To improve investment efficiency, first, we must strengthen the guidance of goals and grasp the direction of investment. The investment objective should be focused on "making up for shortcomings and increasing stamina". In terms of infrastructure, greater support should be made for the "two-fold" project. In terms of real estate, we will accelerate the construction of a new model of real estate development, and carry out in-depth urban renewal actions and renovation of dilapidated houses. In terms of social and people's livelihood, we will speed up the completion of shortcomings in education, medical care, pension and other fields. In terms of manufacturing, we will increase investment in scientific and technological innovation, industrial upgrading, and green transformation.

The second is to insist on taking multiple measures at the same time to stimulate investment vitality. It is necessary to strengthen the coordination between finance and finance, give full play to the role of major projects in driving and leveraging government investment, and standardize the implementation of the new mechanism of public-private cooperation. It is necessary to stabilize the policy expectations and development confidence of private enterprises, and effectively stimulate the vitality of private investment. It is necessary to intensify the institutional opening up of key areas to stabilize and effectively attract foreign investment.

The third is to improve the decision-making mechanism and optimize the investment environment. It is necessary to plan the major projects of the 15th Five-Year Plan as soon as possible. It is necessary to optimize the investment approval process, effectively control all kinds of chaos in attracting investment, correct illegal subsidies, create a fair competition market environment, and prevent distortion of the allocation of factor resources and inefficient investment. It is necessary to reduce all kinds of institutional transaction costs, increase financing support for small and medium-sized enterprises, and promote the reduction of investment and financing costs.

Q: What is the effectiveness of the implementation of the "two new" and "two-fold" policies this year? What are the considerations for next year's policy arrangement?

Answer: This year, the implementation of the "two new" and "two-fold" policies has achieved remarkable results, which has strongly supported the economic growth of the whole year. As of December 12, the "two new" drove more than 5.2 million cars to be renewed, with sales of more than 690 billion yuan, more than 49 million home appliances were renewed, with sales of more than 210 billion yuan, and more than 2 million sets of old equipment were updated. Many people are looking forward to more products being included in the scope of support. The "two-fold" priority is to select major landmark projects across regions and river basins, and has supported the construction of 1,465 major projects, such as the construction of the new land-sea corridor in the western region, the construction of high-standard farmland in the black soil in Northeast China, and the construction of the "Three Norths" project.

The Central Economic Work Conference has put forward clear requirements for doing a good job in the "two new" and "two-fold" work next year. On the basis of summing up and continuing this year's good experience and practices, it is necessary to further expand the scale of issuance of ultra-long-term special treasury bonds and increase the intensity of policy support.

In terms of the "two new", the funds for ultra-long-term special treasury bonds to support the "two new" next year will increase significantly compared with this year; Study the inclusion of more products and fields with wide market demand and high potential for upgrading into the scope of policy support; Further optimize the policy implementation mechanism, strengthen the tracking and efficiency, and improve the efficiency of the use of funds.

In terms of "two-fold", it is necessary to strengthen "hard investment", focus on the development of new productive forces, urban-rural integrated development, regional coordinated development, and high-quality population development, further increase the arrangement of ultra-long-term special treasury bonds, optimize the direction of capital investment, and accelerate the implementation of major strategies and security capacity building in key areas; It is also necessary to do a good job in "soft construction", adhere to the combination of project construction and supporting reforms, constantly improve relevant policies, plans and institutional mechanisms, further improve the investment mechanism, improve the efficiency of investment, solve the current and long-term contradictions and problems, and strive to accomplish a series of major and difficult things, so as to promote the realization of the "twofold" goal.

Question: What are the arrangements and measures for the Central Economic Work Conference next year to expand high-level opening up and stabilize foreign trade and foreign investment?

A: At present, the headwinds of economic globalization are intensifying, geopolitical risks are rising, and global governance challenges are increasing. Under such circumstances, we must expand independent and unilateral opening-up in an orderly manner, consolidate and expand global trade and investment partnerships, and do a good job in stabilizing foreign trade and foreign investment.

First, the magnetic attraction effect of the mega economy is obvious. China has a super-large-scale market and a complete industrial system, which has a strong attraction and influence on countries around the world, and has become a major trading partner of more than 150 countries and regions, and has long maintained the status of the world's second largest foreign capital inflow. Second, high-level opening-up has been further promoted. Recently, the restrictions on foreign investment access in the manufacturing sector have been "cleared", and 100% of the least developed countries that have established diplomatic relations with China will be given zero-tariff treatment for products. Third, the results of innovation and development are becoming increasingly apparent. China is speeding up the construction of a modern industrial system, developing new quality productivity according to local conditions, the development trend of high-end, digital and green manufacturing industry is obvious, and the emergence of new technologies, new products, new scenarios and new business formats is accelerating.

To do a good job in next year's work, the first is to steadily expand institutional opening-up. China will actively align with international high-standard economic and trade rules such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement, accelerate the expansion of a global network of high-standard free trade zones, and promote the negotiation and signing of multilateral and bilateral economic and trade agreements in various forms. Promote the improvement of quality and efficiency of the pilot free trade zone and expand the reform mandate, and accelerate the implementation of the core policies of the Hainan Free Trade Port. The second is to vigorously enhance the resilience of foreign trade. Comprehensive use of export credit insurance, credit, exhibitions and the expansion of overseas financial services to support enterprises to explore diversified markets. Promote the sustainable and healthy development of cross-border e-commerce, promote the construction of overseas warehouse layout, actively develop service trade, green trade and digital trade, promote the innovative development of border people's mutual market trade and bonded maintenance, improve the ability of foreign trade maritime security, and deepen international cooperation on foreign trade product standards and conformity assessment. We will further promote high-quality Belt and Road cooperation. The third is to increase the intensity of attracting and stabilizing investment. Expand the scope of pilot projects in the fields of telecommunications and medical care, and steadily promote the expansion of the opening up of the Internet, education, culture and other service industries. Deepen the reform of the foreign investment promotion system and mechanism, further improve the normalized communication mechanism of foreign-funded enterprises, earnestly address reasonable demands, strengthen the protection of the rights and interests of foreign-funded enterprises and the protection of services, and continue to build the "Invest in China" brand. Further optimize the visa-free entry policy to attract and facilitate cross-border travel of business people.

Q: What are the specific considerations for promoting the development of the private economy next year?

A: The private economy plays an important role in the process of Chinese-style modernization. In recent years, the CPC Central Committee has intensively introduced a series of major measures to support the development of the private economy, and the policy effect is playing a positive role. In the first 10 months of this year, excluding real estate development investment, private investment increased by 6.3% year-on-year; The industrial added value of private enterprises above designated size increased by 5.4 percent year-on-year, an increase of 2.9 percentage points over the same period last year, and the import and export volume of private enterprises increased by 9.3 percent year-on-year, 4.1 percentage points higher than the growth rate of total imports and exports, accounting for an increase of 2.1 percentage points over the same period last year.

The Central Economic Work Conference made new and important arrangements in light of the new situation and new problems in the development of the private economy. In our view, there are three key considerations.

The first is to promote the resolution of the issue of fair competition. It is the core concern of private enterprises to ensure that private enterprises use production factors equally in accordance with the law, participate in market competition fairly, and are equally protected by law. The Third Plenary Session of the 20 th CPC Central Committee made special arrangements for this, and relevant departments are actively implementing them. Next year, the relevant work will be further promoted. For example, we will further break down market access barriers and promote the fair opening of competitive infrastructure fields to business entities. Through the national science and technology plan, support capable private enterprises to take the lead in undertaking major national technological research tasks. At present, the society is highly concerned about the market access of new forms of business and new fields, and it is necessary to formulate guidelines for the construction of a unified national market and optimize the market access environment for new forms of business and new fields.

The second is to promote the resolution of the problem of arrears. Since last year, the departments concerned have organized and carried out a special campaign to clear arrears, which has achieved positive results, but the problem of arrears is still quite conspicuous in all quarters. Next year, the relevant work will be further promoted, and local governments should implement their territorial responsibilities, make good use of policies such as new local government special bonds, and do their best to speed up the repayment of arrears to enterprises. Central enterprises and state-owned enterprises should continue to take the lead in settling arrears, and "pay quickly and fully due" the accounts owed to small and medium-sized enterprises. It is necessary to improve laws, regulations, and institutional provisions, strengthen punishments for untrustworthiness, and promote the implementation of long-term effective mechanisms for resolving the problem of account arrears.

The third is to carry out special actions to standardize law enforcement involving enterprises. The deployment of this meeting to carry out a special action to standardize the law enforcement of enterprises, which means that it will not only seriously investigate and deal with all kinds of violations of laws and regulations, but also focus on rectifying arbitrary fees, fines, inspections, and seizures, which will effectively safeguard the legitimate rights and interests of private enterprises and private entrepreneurs, and strive to create a safe and stable development environment for all kinds of business entities.

Question: General Secretary Xi Jinping has repeatedly emphasized that "major economic provinces take the lead", under the current economic situation, how to better support the major economic provinces to play the role of the main pillars?

Answer: The Central Economic Work Conference emphasized that major economic provinces should be supported to take the lead and other regions should be encouraged to adapt measures to local conditions and show their strengths.

For a long time, major economic provinces have always been the "ballast stone" to stabilize the national economic fundamentals. From the perspective of the supply side, as the main force of innovation, the pioneer of reform, and the vanguard of opening up, major economic provinces are the "source of the formation and development of new business forms, new kinetic energy, and new quality productivity". From the demand side, there are many investment projects in large economic provinces, large consumer markets, and high levels of opening up, which play a "main engine" role in stimulating economic growth.

In 2023, the GDP of the top 10 economic provinces will account for about 61% of the country's total economic output, the top 10 industrial provinces will account for about 64% of the national industrial added value, the top 10 major consumer provinces will account for about 64% of the total retail sales of consumer goods, and the top 10 foreign trade provinces will account for about 82% of the country's total import and export.

In the first three quarters of this year, the top 10 economic provinces contributed 3.1 percentage points to the country's economic growth of 4.8 percentage points. In particular, the package of incremental policies deployed at the meeting of the Political Bureau of the Central Committee on September 26 has generally achieved rapid results in the promotion of the implementation of major economic provinces, and the role of the overall situation of the national economic recovery has been more fully reflected.

At present, the role of major economic provinces in taking the lead is generally good, but they are also facing some difficulties and challenges. Relevant policies are being studied. Preliminary considerations, in terms of financial support, we can increase the support of ultra-long-term special treasury bonds and local government special bonds, expand the scope of use of special bonds, and give more autonomy in project declaration and fund allocation. In terms of factor security, we can increase support in the allocation of factors such as land, energy, environment, and data, and give preference to indicators such as land use, energy use, and sea use, and the implementation indicators of major national projects are listed separately. In terms of reform and opening up, we can support major economic provinces to actively explore and carry out pioneering and integrated reforms, and give more rights to take the lead and try first; Support major economic provinces to launch a number of leading opening-up measures, accelerate the pace of institutional opening-up, and support the construction of opening-up platforms. In terms of scientific and technological innovation, we can give priority to the deployment of national strategic scientific and technological forces and major scientific devices in major economic provinces, promote the deep integration of scientific and technological innovation and industrial innovation, and accelerate the cultivation and development of new quality productive forces.

While supporting major economic provinces to play a leading role, we should also encourage other provinces to display their strengths, strive to be the first, and give full play to their comparative advantages. On this basis, all provinces, autonomous regions and municipalities have strengthened cooperation and coordinated linkage, and jointly played a role in the sustained recovery of the national economy.

Q: The meeting emphasized the need to work together to promote carbon reduction, pollution reduction and green growth, and during the "15th Five-Year Plan" period, China will shift from dual control of energy consumption to dual control of carbon emissions.

A: Next year will coincide with the 5th anniversary of General Secretary Xi Jinping's "dual carbon" goal, and it will also be a key year to establish a new mechanism for the comprehensive transformation from dual control of energy consumption to dual control of carbon emissions. We believe that we should step up the comprehensive green transformation of economic and social development, further deepen the reform of the ecological civilization system, work together to promote carbon reduction, pollution reduction and green growth, and actively and steadily promote carbon peak and carbon neutrality.

First, we need to steadily promote the green and low-carbon transformation of energy. Based on the national conditions dominated by coal, we should insist on establishing first and then breaking down, strengthen the clean and efficient use of fossil energy, especially coal, and resolutely control fossil energy consumption. On the premise of ensuring energy security, accelerate the planning and construction of a new energy system. We will speed up the construction of the "Shagehuang" new energy base, actively develop distributed photovoltaic and distributed wind power, and promote the integrated development of water, wind and solar. Coordinate the construction of local consumption and transmission channels for new energy, take multiple measures to improve the acceptance capacity of the power grid, support the development of the "green direct supply" model, and accelerate the construction of microgrids and source-grid-load-storage integration projects. Establish a number of zero-carbon parks, give priority to the development of emerging industries with low energy consumption, low pollution and high added value, maximize the use of clean energy, and minimize carbon emissions in the production, operation and management of the parks.

The second is to speed up the construction of a national carbon market. It is necessary to improve the carbon emission trading system, steadily expand the coverage of the industry, enrich the varieties and methods of trading, and build a more effective, dynamic and internationally influential carbon market. Improve the voluntary greenhouse gas emission reduction trading system, further expand the support areas of the voluntary emission reduction trading market, and help realize the value of ecological products. Accelerate the establishment of a carbon footprint management system and a carbon labeling certification system covering the whole life cycle of products, and cultivate green certification and other service organizations with international influence. We will further improve the statistical accounting system for carbon emissions, establish an annual report and express reporting system for carbon emission data at the national and provincial levels, and introduce and implement carbon emission accounting standards for a number of industry enterprises, so as to lay the foundation for the implementation of dual control of carbon emissions during the "15th Five-Year Plan" period, which focuses on intensity control and is supplemented by total control.

The third is to accelerate the development of green and low-carbon industries. It is necessary to continue to consolidate and expand the competitive advantages of green and low-carbon industries, create a healthy development ecology of green and low-carbon industries, cultivate new growth points such as green buildings, focus on building a number of green and low-carbon industrial clusters, and continuously increase the proportion of green and low-carbon industries. Accelerate the transformation of traditional industries with green and digital technologies, promote energy-saving, low-carbon and cleaner production technologies and equipment, promote the upgrading of technological processes, and lead the green and low-carbon transformation of traditional industries such as steel and petrochemicals with the improvement of national standards.

Q: How do you see the current situation in the real estate market? How will you do a good job in real estate next year?

A: In recent years, under the strong leadership of the CPC Central Committee, a lot of work has been done to resolve real estate risks, and the policy effect has been accelerated. After the meeting of the Political Bureau of the Central Committee on September 26 made a plan to promote the real estate market to stop falling and stabilize, various departments paid close attention to the implementation of stock policies and the introduction of incremental policies, local governments took active actions, social confidence was effectively boosted, and the real estate market showed a positive momentum of stopping the decline and stabilizing. The Central Economic Work Conference made arrangements for next year's real estate work, emphasizing the need to stabilize the property market and continue to work hard to promote the real estate market to stop falling and stabilize. We believe that we need to focus on three aspects:

The first is to focus on releasing demand. China's new urbanization is still advancing, and there is also a broad space for the optimization and adjustment of urban stock, and the people have formed new expectations for high-quality housing. It is necessary to focus on breaking through the stuck points and blocking points to better meet the needs of residents for rigid and improved housing. Vigorously carry out urban renewal, intensify the implementation of urban villages and dilapidated housing transformation, and promote projects with relatively mature conditions and the urgent willingness of the masses to renovate as soon as possible. According to the city's policies, the restrictive measures have been reduced, and the housing credit and tax policies and measures that have been introduced have been implemented to effectively reduce the cost of housing purchase.

The second is to focus on improving supply. The construction of commercial housing should control the increment, optimize the stock, and improve the quality. It is necessary to reasonably control the supply of new real estate land. The central government has made it clear that local government bonds can be used to support the revitalization of idle land and the acquisition of commercial housing, and it is necessary to pay close attention to improving operational methods. In the acquisition of existing commercial housing, it is necessary to give the city government greater autonomy in terms of the subject of acquisition, the purchase price and the use of housing. It is necessary to take multiple measures to revitalize commercial and office buildings. Vigorously build safe, comfortable, green and smart "good houses". Give full play to the role of the coordination mechanism for urban real estate financing, and resolutely win the battle to ensure the delivery of housing.

The third is to focus on promoting transformation. It is necessary to promote the transformation of the real estate industry in a solid and orderly manner, accelerate the construction of a new model of real estate development, fundamentally solve the shortcomings of the traditional development model, and promote the high-quality development of real estate. It is necessary to improve the housing supply system, promote the transformation and development of the industry, improve the basic systems of housing, land, finance, finance and taxation, and implement the system construction and policy measures that have a direct driving effect on the real estate market to stop falling and stabilize.

With the full implementation of various policies and measures and continuous efforts, the market will further stabilize, the industry will accelerate its recovery, the construction of a new real estate development model will be accelerated, and the high-quality development of real estate will be gradually realized.

Question: How will we properly handle the relationship between local government development and debt reduction next year?

Answer: Rationally borrowing government debt for public expenditure, especially capital expenditure, is a common practice under the conditions of a market economy, which is conducive to making good use of social savings, expanding domestic demand, improving public service capacity, and promoting economic development. At present, China's government debt ratio is about 70 percent, which is generally at a low level in the international community. China's government debt is mainly domestic debt, most of which form effective assets, and there are many other assets and resources that can be revitalized, and the risk of government debt is generally controllable.

In recent years, the CPC Central Committee has deployed and adopted a series of effective measures to prevent and resolve local government debt risks, especially the recent introduction of a large-scale new policy to increase the local government debt limit and replace the stock of implicit debt, and local government debt risks are being effectively mitigated and controlled. To implement the spirit of this year's Central Economic Work Conference, it is necessary to develop debts in the process of development, and effectively prevent and resolve the risks of local government debts.

First, the implementation of more active and promising macroeconomic policies next year will promote the sustained recovery of the economy, which will create a favorable macro environment for preventing and resolving local government debt risks. The implementation of a more active fiscal policy, increasing the scale of government bonds, including local special bonds, and expanding the scope of investment and use will effectively stimulate economic growth and increase the sources of funds for local governments. The implementation of a moderately loose monetary policy will effectively reduce the interest rate on local government debt. Promoting the real estate market to stop falling and stabilize and build a new model of real estate development is conducive to reducing the risk of local government debt.

Second, the Third Plenary Session of the 20th Central Committee of the Communist Party of China made comprehensive arrangements for deepening the reform of the fiscal and taxation system, making it clear that it is necessary to establish a fiscal relationship between the central and local governments with clear powers and responsibilities, financial coordination, and regional balance, and establish a full-caliber local debt monitoring and supervision system and a long-term mechanism to prevent and resolve hidden debt risks. The Central Economic Work Conference proposed to promote the reform of the fiscal and taxation system in a coordinated manner and increase the independent financial resources of local governments, which will provide institutional support for resolving local government debt risks.

The third is to implement a series of targeted debt measures to reduce the risk of local government debt. This includes doing a good job in the replacement of implicit debts of local governments, scientifically classifying and accurately replacing them, optimizing the debt structure, and reducing the interest burden. At the same time, it is necessary to speed up the improvement of the government debt management system, strictly regulate the borrowing behavior of local governments, resolutely curb the impulse to borrow in violation of regulations, and absolutely not increase new debts in violation of regulations while resolving the risk of existing debts.

Through the above measures, the government debt will be gradually matched with economic development and government financial resources, forming a virtuous circle of debt and development, and effectively reducing the risk of local government debt.