Key Takeaways from China's 2022 Central Economic Work Conference

Executive Summary

The Central Economic Work Conference is a two-day annual meeting convened every December by the Central Committee of the Communist Party of China and the Chinese Government’s State Council. The Conference gathers together the country’s top leadership to discuss the state of China’s economy; review the government’s economic work; and set the direction of the economic policy agenda for the coming year. Against a backdrop of increasing economic headwinds, the 2022 meeting sent a clear message about the government’s intention to facilitate an enabling policy environment that can support the stabilization of the Chinese economy. 

Insights for What’s Ahead

• The 2022 Central Economic Work Conference suggests that the policy environment in 2023 will be aimed at helping stabilize the Chinese economy and addressing headwinds to support a growth rebound more in line with official targets. It is clear that the target for 2022 of “around 5.5 percent” was missed, with our estimates suggesting that the GDP expanded instead by 2.7 percent. The meeting called to strengthen fiscal and monetary support, and has also established a series of priorities, including a recovery and expansion of consumption and the stabilization of the housing market. The meeting has also set the attraction and utilization of foreign investment as a top objective for 2023, which should prove positive for MNCs’ operating landscape.
• While the meeting did not reveal any specific growth targets for 2023 – e.g., GDP, it did set a series of broad objectives for this year’s economic policy agenda which will inform the discussions at upcoming annual plenary sessions of the National People’s Congress and the Chinese People's Political Consultative Conference – also known as the ‘Two Sessions.’ Overall, we found the growth-focused tone in the 2022 CWEC reasonable given the current headwinds that are impacting China’s economic outlook, with the key messages well aligned with our expectations vis-à-vis the policy environment in 2023. We therefore have kept our forecast for China’s GDP growth in 2023 unchanged at 5.1 percent.
• China’s ‘dynamic zero-COVID’ strategy is all but officially scratched. The official readout of the meeting did not mention this strategy, instead making reference to a ‘new phase’ of prevention and control wherein COVID-19 has been downgraded from a Class A to a Class B infectious disease. While this arguably means that there is no longer a need for such stringent control measures to face the pandemic, it is impossible to know how the virus will evolve in the coming months and how local healthcare systems (especially in lower tier cities) will fare once the ongoing wave of infections reaches them. If the situation proves unbearable, local authorities might be forced to reimpose controls to some extent.