China has wrapped up its Economic Work Conference (EWC), an annual meeting in which policymakers assess the current state of the economy and set the tone for the next year’s macroeconomic policy.
The closed-door meeting highlighted six key tasks for Beijing in 2014.
Policymakers made food safety their top priority. Cutting China’s excess capacity was the second priority. Here are all six from Bank of America’s Ting Lu:
- Increase national food security and safety.
- Improve industry structures, develop new growth drivers, and cut excess capacity.
- Control and tackle local government debt risks.
- Promote balanced growth in different regions.
- Improve social welfare with focus on providing jobs to college graduates and workers laid off in industries with excess capacity and increasing supply of social housing.
- Raising the level of openness by speeding up talks on free trade zones and investment treaties.
Ting sees two reasons that food security became the top priority for policymakers. First, 10% of food consumed in China in 2012, was imported and domestic food contamination worries continued to rise. Second, local governments taking advantage of the push for urbanization exacerbated land grabs.
“Our understanding is that by emphasising food security, the CPC will take a more cautious approach in drafting and implementing land reforms,” writes Ting in a note to clients.
The last two days of the conference were spent discussing the urbanization strategy, though not a lot was said on the subject in the EWC’s communique.
No growth target was announced either, but this will most likely be revealed during the People’s Congress in March.
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