Editorial | Hong Kong has a role to play in building a strong, unified national market

According to the official readout, the meeting candidly discussed problems facing the economy, including the ailing property sector, excess industrial capacity and price wars. With the economy still in rapid transformation, these issues can be solved.

In terms of overall direction, there was a need to seek more progress domestically while trying to maintain stability – language suggesting that growth remains the priority. There was talk of measures such as a relatively loose fiscal policy and continued use of bonds and other tools such as rate cuts and reserve ratio reductions to inject more capital into the economy.

The trade surplus means that despite efforts to raise domestic consumption – such as the dual circulation strategy – the economy remains powered by exports. One reason to stimulate consumption is that trade is only going to get tougher. Many more countries, including in Europe, may become protectionist. Heavy reliance on exports would then become a serious problem as China is trying to shift away from an export-oriented economy. One solution is a unified domestic market, instead of fragmentation around trade barriers erected by local governments to protect their own interests. It is a big part of next year’s domestic growth strategy.

While there may be talk of fiscal stimulus, it is unlikely to be like old times, with capital just being injected into the general economy. It will be targeted where it will be most effective in driving growth, such as innovation, tech companies, small-to-medium-sized enterprises that create jobs and innovative growth areas such as the Greater Bay Area, including Hong Kong. The latter have a role to play in leading China’s economic transformation in the coming year. Hong Kong needs to work closely with them, particularly the rest of the Greater Bay Area, to help build a strong unified market.