BEIJING -- Chinese President Xi Jinping addressed the nation as the new year approached, stressing the need for strategic resolve to face economic challenges head-on. At the New Year gathering organized by the Chinese People's Political Consultative Conference (CPPCC), he emphasized the importance of unity among the Chinese people during turbulent times, stating, "On the...journey of Chinese modernization, we will not only encounter clear skies and gentle breezes, but also face high winds, choppy waters, and even dangerous storms." He continued to express optimism about the country's development, even amid global uncertainty, and underscored the need for proactive macroeconomic policies to stimulate recovery and improve living standards as China looks forward to 2025.
Looking back at 2024, Xi noted the various challenges confronting the economy, particularly stemming from international conditions and domestic pressures. Despite those hurdles, he reported success in meeting key development targets, signaling resilience and foreshadowing ambitious plans as the country prepares to transition from the 14th Five-Year Plan to the forthcoming 15th Five-Year Plan. Pointing to the year 2025, Xi stated, "Efforts will be made to implement more proactive macro policies to promote sustained economic recovery and improvement..." This reaffirmation of commitment to high-quality growth underlines the government's approach to navigate the economic environment.
At the same gathering, Xi commended the CPPCC for its role in providing suggestions and garnering public support on various issues, advocating for the body’s continued engagement as a consultative mechanism. He lauded the effectiveness of their contributions and insisted on leveraging these insights to bolster the nation’s collective goals.
The Chinese administration is also working on significant adjustments to the import-export tariffs effective from January 1, 2025. According to the Customs Tariff Commission of the State Council, the new tariff structure will aim to expand domestic demand and align more closely with industrial advances. Key adjustments include lowering tariffs on medical supplies and green products, which are seen as integral to both public welfare and sustainable economic growth.
Provisional import tariff rates will apply to 935 items, which means consumers can expect reduced costs on products ranging from healthcare materials to components used for advanced manufacturing. The adjustments will not only lower tariffs on raw materials like polyolefin polymers and ethylene-vinyl alcohol copolymers but will also impose increases on items such as syrup and sugar-containing premixes to protect and promote domestic industries.
For Xi and the policymakers, the overarching goal is crystal clear: position China favorably within the global market by leveraging tariff structures and promoting innovation. Tariff adjustment plans signal China's commitment to both economic stability and the facilitation of future industrial advancements. With approximately 8,960 tax items affected, the changes speak volumes about the intensifying focus on healthcare and green technologies.
Reflecting on the broader economic environment, analysts have noted growing challenges, including low consumer spending typical of the current deflationary climate, exacerbated by the country's real estate crisis. Despite proactive attempts to ease fiscal pressure -- like interest rate reductions and increasing local government debt limits -- many experts point to the need for more aggressive interventions. Commenting on the economic slowdown, Xi remarked, "The economy faces 'pressures' to 'transform' and move from 'old growth drivers to new ones.'" This clearly indicates the government's recognition of the urgent need for economic restructuring.
Meanwhile, recent data concerning China's manufacturing activity has provided mixed signals. Although the manufacturing index showed slight upticks, fueled by increased export orders, there remains skepticism about the ability to meet the official GDP growth target of 5% set for 2024. Xi expressed confidence but was quick to acknowledge management of external shocks, especially from potential trade tensions with the United States which could arise with the incoming administration.
The government’s strategies moving forward, as indicated by the planned tariff changes, include not only economic revitalization but also addressing pressing issues such as healthcare accessibility and transitional energy policies. The adjustments speak to China’s broader vision of fostering technological innovation and improving the quality of life for its people.
Overall, as China navigates this precarious yet promising path toward economic recovery and growth, the emphasis on combined efforts—both from the government and the populace—will be key to overcoming impending challenges. Policymakers have their eyes set on 2025 not just as another year but as a pivotal point of change, leading toward renewed victory on the global stage.