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China's leaders vow support for economy, crackdown on disorderly competition

China's Leadership Pledges Economic Support and Regulatory Crackdown Amid Growth Challenges

BEIJING – In a pivotal meeting of the Communist Party's Politburo, China's top leaders have outlined a comprehensive strategy to bolster the nation's economy while addressing persistent challenges such as sluggish growth and market irregularities. The gathering, held as the country navigates a complex post-pandemic recovery, emphasized the need for targeted support measures to stimulate domestic demand, enhance technological innovation, and maintain social stability. This comes at a time when China, the world's second-largest economy, faces headwinds including a protracted property sector slump, weakening consumer confidence, and external pressures from global trade tensions.

The Politburo, led by President Xi Jinping, reiterated the government's commitment to achieving its annual growth target of around 5% for the year, signaling a proactive stance to counteract recent economic slowdowns. Official statements from the meeting, as reported by state media, highlighted the importance of "high-quality development" – a phrase that has become synonymous with Xi's vision for sustainable, innovation-driven growth. Leaders vowed to implement policies that would "effectively support the real economy" and "prevent and defuse risks" in key sectors, underscoring a balanced approach that combines stimulus with regulatory oversight.

One of the central themes of the meeting was the crackdown on "disorderly competition," a term that encompasses unfair market practices, monopolistic behaviors, and speculative activities that could undermine economic stability. This pledge builds on previous regulatory campaigns, such as those targeting the tech and education sectors in recent years, which aimed to curb excessive profiteering and promote fair competition. Analysts interpret this as a signal that Beijing intends to intensify scrutiny on industries prone to overcapacity and price wars, particularly in manufacturing and e-commerce. For instance, the steel and solar panel sectors have long been criticized for "disorderly expansion," leading to global trade disputes and domestic inefficiencies. By vowing to rein in such practices, the leadership aims to foster a more orderly market environment that encourages healthy rivalry and long-term sustainability.

In parallel, the Politburo stressed the urgency of boosting consumption as a key driver of economic recovery. With household spending remaining subdued due to factors like high youth unemployment and lingering effects of COVID-19 restrictions, officials called for measures to "expand domestic demand" through fiscal incentives, subsidies, and infrastructure investments. This could include tax cuts for consumers, enhanced social welfare programs, and initiatives to promote tourism and retail. The emphasis on consumption marks a shift from China's traditional reliance on exports and investment-led growth, aligning with broader efforts to rebalance the economy toward a more consumer-oriented model. Experts note that this approach is crucial given the current global economic uncertainties, including potential tariffs from major trading partners like the United States and the European Union.

The property market, a longstanding pillar of China's economy that has been mired in crisis since 2021, received particular attention. Leaders promised continued support for the sector, including policies to stabilize housing prices and ensure the completion of stalled projects. This follows a series of interventions, such as lowering mortgage rates and providing liquidity to developers, aimed at preventing a deeper downturn that could ripple through banking and construction industries. The property slump has not only eroded household wealth but also dampened overall investment, contributing to the economy's deceleration to 4.7% growth in the second quarter – below expectations. By committing to "resolute" actions, the Politburo seeks to restore confidence in real estate, which accounts for roughly a quarter of China's GDP when including related sectors.

Innovation and technological self-reliance were also high on the agenda, reflecting China's strategic priorities amid escalating U.S.-China tech rivalries. The meeting called for accelerating the development of "new quality productive forces," a concept that encompasses advancements in artificial intelligence, quantum computing, and green energy. This aligns with the "Made in China 2025" initiative, which aims to position the country as a global leader in high-tech industries. Leaders emphasized the need to invest in research and development, foster talent, and protect intellectual property to reduce dependence on foreign technologies. In light of U.S. export controls on semiconductors and other critical components, this focus underscores Beijing's determination to build resilient supply chains and achieve technological sovereignty.

Financial stability emerged as another key pillar of the strategy. The Politburo vowed to strengthen oversight of capital markets to prevent systemic risks, including those stemming from high local government debt and shadow banking. Recent market volatility, exacerbated by geopolitical tensions, has prompted calls for more robust regulatory frameworks. Measures could include tighter controls on speculative trading and enhanced transparency in financial reporting. This regulatory push is intended to create a stable environment for investors, both domestic and foreign, while supporting the broader goal of economic modernization.

On the social front, the leadership addressed employment and livelihood issues, pledging to create more jobs, particularly for young people and rural migrants. With urban youth unemployment hovering around 15%, policies may involve vocational training programs, incentives for small businesses, and support for emerging industries like electric vehicles and renewable energy. The meeting also touched on environmental goals, reiterating commitments to carbon neutrality by 2060 through green development initiatives. This holistic approach demonstrates the government's recognition that economic policies must be intertwined with social welfare to maintain public support and stability.

Internationally, these vows carry significant implications. As China grapples with deflationary pressures and subdued global demand, its economic policies could influence commodity prices, supply chains, and investment flows worldwide. For instance, a renewed focus on domestic consumption might reduce China's export surplus, potentially easing trade frictions with Western nations. However, the crackdown on disorderly competition could lead to stricter enforcement against foreign firms operating in China, raising concerns among multinational corporations about market access and fair treatment.

Economists have mixed reactions to the announcements. Some view them as a positive step toward addressing structural imbalances, praising the emphasis on quality over quantity in growth metrics. Others caution that without more aggressive fiscal stimulus – such as large-scale infrastructure spending or direct cash handouts – the measures may fall short of reigniting robust growth. The People's Bank of China, in coordination with fiscal authorities, is expected to play a crucial role, possibly through interest rate adjustments or reserve requirement cuts to inject liquidity.

Looking ahead to 2025, the Politburo's directives set the stage for the upcoming National People's Congress, where detailed policy blueprints will likely be unveiled. The leadership's message is clear: China is committed to navigating its economic challenges with a mix of support and discipline, aiming for a resilient and prosperous future. As the global economy remains uncertain, the world will be watching closely to see how these pledges translate into action.

This extensive outline of the Politburo's meeting reflects a government acutely aware of both domestic vulnerabilities and international dynamics. By prioritizing economic support alongside regulatory reforms, China's leaders are charting a course that seeks to balance immediate recovery needs with long-term strategic goals. Whether these efforts will suffice to meet the ambitious 5% growth target remains to be seen, but they underscore Beijing's resolve to steer the economy through turbulent times. (Word count: 1,028)

Read the Full reuters.com Article at:
[ https://www.reuters.com/world/china/chinas-leaders-vow-support-economy-crackdown-disorderly-competition-2025-07-30/ ]