China pledged on Thursday to increase the budget deficit, issue more debt and loosen monetary policy to maintain a stable economic growth rate as it gears up for more trade tensions with the United States.
The remarks came in a state media readout of an annual agenda-setting meeting of the country's top leaders, known as the Central Economic Work Conference (CEWC), which was held on Dec. 11-12.
This year's meeting comes as the world's second largest economy is stuttering due to a severe property market crisis, high local government debt and weak domestic demand. Its exports, one of the few bright spots, are facing the threat of higher U.S. tariffs as Donald Trump returns to the White House.
"The adverse impact brought by changes in the external environment has deepened," state media said following the closed-door CEWC.
The CEWC pledges match the tone of one of Communist Party leaders' most dovish statements in more than a decade, which was released on Monday after a meeting of the Politburo, a top decision-making body.
The Politburo signalled Beijing was ready to deploy the stimulus needed to counter the impact of any tariff hikes. Officials said they would switch to an "appropriately loose" monetary policy stance, "more proactive" fiscal levers, and step up "unconventional counter-cyclical adjustments."
"It is necessary to implement a more active fiscal policy, raise the fiscal deficit ratio, increase the issuance of ultra-long-term special treasury bonds, and increase the issuance and use of special local government bonds," the CEWC summary said.
Leaders also vowed to reduce bank reserve requirements and cut interest rates "in a timely manner."
This dovish shift in messaging shows China is willing to go even deeper into debt, prioritising, at least in the near term, growth over financial risks, analysts said.
At CEWC, Beijing sets targets for economic growth, the budget deficit, debt issuance and other variables for the year ahead. The targets are agreed at the meeting, but won't be officially released until an annual parliament meeting in March.
Reuters reported last month that government advisers recommended that Beijing keeps its growth target of around 5% unchanged next year.
The CEWC readout said it was "necessary to maintain steady economic growth," but did not mention a specific number.