The BGA China team, led by Adviser Eric Wang, wrote an update to clients on the Central Economic Work Conference (CEWC).

Context

  • China closed its economic policymaking year with the CEWC, held from December 11-12 in Beijing. The conference marks a year of economic growth despite structural challenges such as high rates of youth unemployment and a slump in the property sector.
  • The government emphasized policy stability to support growth, including measures to spur domestic consumption. The conference identified consumption as key to driving economic recovery and domestic demand.

Significance

  • China’s “three new” economies — new industries such as new energy, AI and the digital economy; new business forms such as internet plus and the metaverse; and new business models — are developing rapidly. Their added value as a proportion of GDP is increasing, but the absolute scale of new drivers is still low.
  • The Third Plenary Session of the 20th Central Committee did not take place as expected this fall. Typically, the Chinese Communist Party announces its economic strategy, including national development and reform goals, for the next five to 10 years at this plenum.

Implications

  • Companies should note the expected release of a fiscal reform package next year to stabilize the economy and raise growth and employment expectations. The fiscal package could include increasing bonds for capital, tax cuts and industrial policy updates to support science and technology.
  • Although Beijing continues to woo foreign investment, including by relaxing data and technology regulations, geopolitical tensions with the United States have dampened China’s ability to attract and retain overseas business. More specific policies to support China’s development goals are expected in 2024.

We will continue to keep you updated on developments in China as they occur. If you have any comments or questions, please contact BGA Adviser Eric Wang at ewang@bowergroupasia.com.

Best regards,

BGA China Team

A small ginko leaf

Advisor

Eric has over two decades’ experience in government affairs and public relations and currently serves as firm partner and managing director of Yuan Associates. He has worked with more than 80 clients in manufacturing, agriculture and food, consumer goods and service industries. Eric joined Yuan Associates in 2005 and become a partner and managing director in 2011. As managing director, he is responsible for comprehensive government affairs service for and management of clients. As a partner his responsibilities include overseeing the firm’s daily overall operations. Prior to joining Yuan Associates, Eric worked as an account manager for Euan Barty Associates ... Read More