China's Central Economic Work Conference

The Chinese Communist Party (CCP) wrapped up the two-day Central Economic Work Conference (CEWC) on Tuesday.

‘Central’. ‘Economic’. ‘Work’. ‘Conference’.

It’s hard to think of four duller words, and having been in the audience for a CCP work conference previously ourselves, we can confirm they are indeed extremely dull events. But this meeting is consequential, and here’s why.

The CEWC is an annual meeting of top officials chaired by China’s president to take stock of the past year and set the economic agenda for the year ahead. But this year’s CEWC wasn’t like the dozens before it.

First, it came at a bleak time. China continues to grapple with record-breaking challenges across real estate, youth unemployment, local government debt, and beyond, with implications for the world at large.

Second, an earlier high-profile economic meeting, the Third Plenum, was unexpectedly and inexplicably delayed in recent weeks, adding to a sense of uncertainty around President Xi’s forward plans (a new date is still TBC).

And so third, with the world eagerly watching this week’s CEWC for insights into President Xi’s thinking, we were instead surprised to see him ditch the second half of the conference for a state visit to Vietnam.

What did Xi and his team end up saying about their plans for 2024?

According to the official readout (🇨🇳), they listed nine priorities:

1. At the top (up a place from last year) is “[creating] a modern industrial system [...] focusing on disruptive and cutting-edge technologies”. This really looks like a response to US efforts to limit China’s access to key tech.

2. In second place (it was first last year), we have “expanding domestic demand”, which comes after recent economic data suggesting both consumer and business confidence are hovering near five-year lows.

3. Taking the bronze, there’s “deepening reforms in key areas”, listing a bunch of items that seem pitched both at locals (“taxation system reform”) and foreigners (“rights protection”).

4. And in fourth, there’s “opening up to the outside world“, which implicitly accepts that international sentiment towards China has turned. It calls for everything from an “Invest in China” brand to the removal of hurdles for foreigners to “come to China for business, study, and tourism”.

The other five focus on addressing risks (like in real estate), plus progressing various bits of work across rural, urban, environmental, and livelihood issues.

Overall, the document strikes a tone of methodical confidence. It sums up China’s economic position by noting that “favourable conditions outweigh unfavourable factors”.