Fiscal policy particularly supports innovation through incentives such as additional credits for research and development, tax breaks for key industries, and tax breaks for individuals for converting scientific and technological achievements. Advanced manufacturing companies will benefit from investment-linked tax incentives, such as refundable value-added tax credits and accelerated depreciation of fixed assets.
China’s monetary policy in 2024 will utilize structural financial instruments to strengthen monetary policy. digital economy, making up a significant portion of the economy. The People’s Bank of China (PBOC) will guide financial institutions to direct lending to specific industries, thereby reducing financing costs and promoting growth in vital areas such as technological innovation, advanced manufacturing, and green development. I’m planning on doing it.
However, the success of these policies depends on many variables beyond the immediacy of policy implementation. For example, even if all policies are fully implemented, technological breakthroughs usually require a long nurturing process and cannot be easily achieved in a short period of time.From the perspective of international competition, some industries in China Continue to “suffocate” by foreign countries.
Stock markets are expected to continue to face challenges in 2024 Liquidity challenges. Some portfolio managers are predicting a modest rise after four years of recovery efforts. However, until the liquidity problem is fundamentally resolved, the stock market will continue to struggle, and at best there will be only a small rebound brought about by government stabilization efforts.
Shanghai Stock Exchange star market Focus on hard technology, dual circulation strategy To attract investors from all over the world. Significant investment is expected as policymakers continue to explore new growth drivers in areas such as semiconductors, pharmaceuticals, environment, social and corporate governance (ESG), new energy, and high-end manufacturing. This particularly suggests that star market valuations are at historic lows, potentially leading to a market rebound.
However, due to external factors such as conflicts between major powers, us election and US monetary policy (i.e. federal reserve interest rate prices (which may remain higher and longer than many expect) can cause significant market fluctuations and affect overall performance.
Meanwhile, China’s real estate sector, crucial to the economy, is facing a crisis. careful readjustment. Balancing economic stability, preserving jobs, and preventing speculative bubbles will continue to be a policy priority.
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Booms, busts, and borrowing: Has China’s housing market slumped?
Booms, busts, and borrowing: Has China’s housing market slumped?
In 2024, China will continue to implement city-specific policies, strengthen the people-oriented nature of real estate, and increase financial support for affordable housing construction. Notably, the PBOC’s policy meeting on December 27 discussed “equally meeting the reasonable financial needs of various real estate developers.”
This statement is important. It emphasizes fair treatment of state-owned and private enterprises. In theory, this is a very positive signal for private companies in need of financing.
The term “reasonable” has two main meanings. One is continued support for real estate companies’ financing needs, which is expected to ease to some extent next year. Second, policymakers aim to prevent too much capital from flowing into the industry, reflecting the government’s strategy to support without over-promoting.
Painfully, China needs to break its habit of real estate speculation
first class city, Excluding GuangzhouCountries that have experienced the greatest declines in house prices have maintained purchase restrictions. If market conditions deteriorate further in the first quarter of 2024, regulations may be eased further.
However, relaxing purchasing restrictions is one of the most influential policy measures for first-tier cities. Any mitigation is therefore expected to be cautious and is likely to start from the periphery instead.
Land and housing prices are expected to recover in some core urban areas of tier-1 and tier-2 cities, but the increase will be modest and significant changes are unlikely this year.
The Chinese economy in 2024 will undergo structural changes. Investor and consumer confidence issues, international tensions, etc. US-China trade war. The government’s plans to foster a unified market, increase domestic demand, and promote investment and foreign trade clearly demonstrate the country’s strategic foresight.
At this point, the possibility of the entire system collapsing is extremely low, but there are many challenges along the way. 4.6% economic growth Next year will be a big achievement for China.
In summary, China’s 2024 economic strategy is a combination of ambition and prudence, aiming for stability and growth amid uncertainty. The effectiveness of the policy and global trends will be important. Policymakers, investors, and observers need to understand these nuances as China’s decisions impact the global economy.
As China sets its course, the international community is watching with bated breath in anticipation of what kind of impact China’s economic decisions will have on the international stage.
Yuhan Zhang is a scholar based at the University of California, Berkeley, specializing in the political economy of China. He is also an adjunct assistant professor at the G20 Center of the International Business School of Beijing Foreign Studies University.
