Sinobravo Policy Express (December, 2024)

2025-02-05

Editor's Note:

In November, under the continuous release of macro policy effects, the national economy operated steadily with progress. The services sector grew rapidly, with the production index increasing by 6.1% year-on-year; industrial growth accelerated, with added value increasing by 5.4% year-on-year; the total retail sales of consumer goods increased by 3.0% year-on-year; fixed asset investment grew steadily, with a year-on-year increase of 3.3%; investment in high-tech industries grew by 8.8% year-on-year; the total goods imports and exports grew by 1.2% year-on-year, with trade structure continuing to optimize; the urban surveyed unemployment rate was 5.1%; the consumer price index increased slightly year-on-year, and the year-on-year decline in industrial producer prices narrowed. Overall, the economy continued its recovery trend. However, it is also important to recognize that the international environment has become more complex and uncertain, domestic demand remains insufficient, and some enterprises face operational difficulties. Nevertheless, through more proactive macroeconomic policies, expanding domestic demand, promoting the integration of technological and industrial innovation, and effectively guaranteeing and improving people's livelihoods, the positive factors in economic operations are expected to accumulate, further stimulating market vitality.

On December 9, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the economic work for 2025. As a prelude to the Central Economic Work Conference, the new approaches presented at this meeting attracted much attention. Compared to the "seeking progress while maintaining stability, promoting stability through progress, and first building and then breaking" approach proposed in the December 2023 Central Political Bureau meeting, this meeting emphasized, "Next year, we must adhere to seeking progress while maintaining stability, promoting stability through progress, upholding integrity and innovation, first building and then breaking, system integration, and coordinated cooperation." This shift not only aims at promoting steady economic growth but also sets higher demands for further deepening reforms and strengthening the coordination of macroeconomic policies. The meeting stressed that "economic system reforms should play a leading role in driving the economy, and landmark reform measures should show tangible results." It also emphasized "the need to implement a 'policy combination punch' to improve the foresight, targeting, and effectiveness of macro-control," signaling stronger efforts in policy integration and reform.

Economic Operation

On December 16, the National Bureau of Statistics released the economic data for November. The national economy is steadily recovering, and the main development goals for the year are expected to be achieved smoothly:

Agricultural output achieves new heights: The total grain output for the year is 14.13 billion kilograms, a 1.6% increase from the previous year. The autumn grain output is 10.57 billion kilograms, a 1.4% increase year-on-year; total cereal production is 13.046 billion kilograms, up 1.7% from last year.
Industrial growth accelerates: In November, the industrial value-added output of large enterprises increased by 5.4% year-on-year, with a month-on-month increase of 0.46%. The equipment manufacturing and high-tech manufacturing industries saw rapid growth.
Services sector expands: In November, the service production index increased by 6.1% year-on-year.
Retail sales continue to grow: In November, the total retail sales of consumer goods increased by 3.0% year-on-year.
Stable growth in fixed asset investment: From January to November, fixed asset investment totaled 46.58 trillion yuan, a 3.3% year-on-year increase. Investment in high-tech industries rose by 8.8%, and private investment grew by 6.2%.
Foreign trade continues to grow: In November, the total import and export value of goods was 3.75 trillion yuan, a 1.2% year-on-year increase. Exports amounted to 2.22 trillion yuan, growing by 5.8%, while imports were 1.53 trillion yuan, down by 4.7%.
Slight increase in CPI: In November, the Consumer Price Index (CPI) rose by 0.2% year-on-year, while the Industrial Producer Purchase Price Index fell by 2.5% year-on-year, with a month-on-month decrease of 0.1%.
Stable employment situation: From January to November, the urban surveyed unemployment rate averaged 5.1%. In November, the urban surveyed unemployment rate was 5.0%, consistent with the previous month.

Policy Environment

High-Level Interactions

December 25: Premier Li Qiang met with Japanese Foreign Minister Yoshimasa Hayashi. Li emphasized expanding economic and trade relations, deepening mutually beneficial cooperation, and benefiting both nations' businesses and peoples. He highlighted that the foundation of state relations lies in close people-to-people ties, urging further strengthening of cultural exchanges.
December 12: President Xi Jinping met with Dmitry Medvedev, Chairman of Russia's United Russia Party. Xi stressed the importance of close communication and cooperation between China and Russia in multilateral frameworks such as the United Nations, BRICS, and the Shanghai Cooperation Organization, and reaffirmed China’s stance on the Ukrainian crisis, promoting de-escalation and a political resolution.
December 11: Xi Jinping sent a congratulatory message to the US-China Business Council's 2024 Annual Gala, expressing China’s commitment to openness and creating a world-class business environment for global enterprises, including American businesses. He called for continued support for China-US relations and the shared goal of promoting mutual benefits and cooperation.
December 10: Xi Jinping met with international economic leaders attending the "1+10" Dialogue in China, reinforcing China's willingness to maintain dialogue, expand cooperation, and manage differences with the US.
December 9: Premier Li Qiang held the “1+10” Dialogue with international economic leaders. Li highlighted China’s willingness to strengthen cooperation with the World Bank, the International Monetary Fund, and other international financial organizations.
December 5: He Lifeng, Vice Premier of the State Council, met with Laurence Fink, Chairman and CEO of BlackRock. They discussed deepening financial system reforms and expanding financial cooperation between China and foreign institutions.

Outbound Direct Investment (ODI)

State Council: Issued the "Opinions on Digital Trade Reform and Innovation Development," promoting the integration of the real economy and digital economy, advancing digital trade reforms, and enhancing international trade capabilities.
Customs Administration: Published the revised origin standards under the "Mainland-Hong Kong Closer Economic Partnership Arrangement" (CEPA), further facilitating trade between mainland China and Hong Kong.
CSRC: Revised regulations for Hong Kong mutual recognition of funds, easing restrictions on the transfer of investment management functions to overseas affiliates, fostering collaboration between mainland China and Hong Kong capital markets.
State-Owned Assets Supervision and Administration Commission (SASAC): Released guidelines for improving the market value management of listed companies controlled by central enterprises, promoting mergers and acquisitions to enhance investment value.
Ministry of Commerce: In the first 11 months of 2024, China's non-financial direct investment abroad amounted to $128.63 billion, a year-on-year increase of 11.2%. Investments in countries along the Belt and Road Initiative totaled $30.17 billion, up 5.1%.

Foreign Direct Investment (FDI)

State Council: Approved the “Yiwu City International Trade Reform Plan,” aiming to enhance market procurement trade, improve cross-border e-commerce regulations, and advance cooperation along the Belt and Road Initiative.
Ministry of Health: Issued a plan for pilot expansion of foreign-invested hospitals, aiming to bring in high-level international medical resources to enhance domestic medical services.
Customs Administration: Announced optimized regulations for cross-border e-commerce exports, promoting the high-quality development of the sector.
National Development and Reform Commission (NDRC): Issued revised "Encouraged Foreign Investment Industries Catalog" to guide and attract foreign investments into specific sectors.

Taxation

December 25: The Standing Committee of the 14th National People's Congress reviewed and passed the “Value-Added Tax Law of the People's Republic of China,” to be effective from January 1, 2026, which further aligns the VAT framework with international standards.
State Taxation Administration: Released draft measures for regulating tax services, aiming to enhance tax order and protect taxpayers' rights.

Please click on the link below to read more about industry trends:中富博睿政策速递（2024年12月刊）

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