Caixin Editorial: Where to Seek Economic Vitality

To ensure growth and vitality, reform is key, but systemic guarantees to prevent actions that stifle economic and social dynamism are also crucial

Whether the government can boost economic vitality hinges on achieving breakthroughs in key areas of reform such as state-owned enterprises, the fiscal and tax system, and the financial system. Photo: VCG

The recent Central Political Bureau meeting and Central Economic Work Conference outlined the overall plan for continuing the economic recovery in 2024. Among the many points covered, the meetings called for “effectively enhancing economic vitality,” and stressed the importance of relying on reform and opening up to enhance endogenous development.

The emphasis on “economic vitality” and “endogenous development” has garnered significant attention, prompting deep reflection on what restricts vitality and how to stimulate and grow it.

Indeed, China’s economic growth potential remains immense, with vast infrastructure and industrial systems, continuous technological innovation, a large workforce including high-quality and relatively low-cost labor, and a unified market. But it’s undeniable that China’s economy faces severe challenges, which the Central Economic Work Conference summarized as insufficient effective demand, overcapacity in some industries, weak social expectations, numerous risk hazards, domestic circulation blockages, and increasing complexity, severity, and uncertainty in the external environment.