China unveils plan to boost domestic demand, technological self-reliance

China has set forth an economic agenda aimed at expanding domestic demand, ensuring a swift recovery, and promoting stable growth, according to an interim report on China's 14th five-year plan published by parliament on Wednesday.

China will prioritise the restoration and expansion of consumption, stabilise bulk consumption, and promote service consumption, Zheng Shanjie, head of the state economic planning body, said.

In recent months, China has implemented a series of measures to bolster its post-pandemic economic recovery.

However, the full recovery has been hindered by challenges in the property sector, risks associated with local government debt, and sluggish global growth.

Reiterating the importance of resolving the crisis in the property sector and keeping local debt under control, China's state planning body stressed on the need for deeper market-oriented reforms to boost development.

The country is also set to coordinate the resolution of risks in key areas such as real estate, local government debt, and small and medium-sized financial institutions.

Addressing concerns over technology exports, Zheng stated, "(China) must accelerate breakthroughs in key core technologies, achieve a high level of scientific and technological self-reliance, and avoid technologies and industries being 'locked' in the low-end and middle-end."

This call comes amid rising tensions between the US and China over key technologies.

Meanwhile, industrial profits in China witnessed double-digit growth in November, marking the fourth consecutive month of positive trends.

The 29.5 per cent rise in profits, following a 2.7 per cent increase in October, signals an improvement in overall manufacturing.

These industrial profit numbers cover firms with annual revenues of at least $2.80 million.

However, weak demand continues to constrain business growth, prompting calls for more macro policy support.

State-owned firms reported a 6.2 per cent decline in earnings this year, while foreign firms saw an 8.7 per cent fall.

In contrast, private-sector companies posted a 1.6 per cent gain, providing a mixed outlook for China's industrial sector in 2023.

(With inputs from Reuters)

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