As I see it | China’s tactical correction of economic policies to put short-term growth on track

A series of big shifts in China’s social and economic policies has taken place this year after central authorities abruptly ended the “dynamic zero-Covid” strategy in late 2022.

The general direction has swung to pro-growth through “normalising” economic activities, and in recent months, Chinese authorities have accelerated their tactical correction amid intensifying pressure of an economic slowdown.

These moves have delivered the message that economic growth is still a priority for the Chinese leadership and that the 5 per cent gross-domestic-product growth target for this year still matters.

While some of the adjustments seem to show that officials are behind the curve, at least Beijing appears ready to do more to reach its growth target: the deeper the economic slump, the more forceful the government’s efforts to stem the tide.

One noticeable change this year is a shift in attitude towards the private sector. China’s efforts to silence open attacks on “capital” and individual capitalists have helped lessen fears, but it may take more time for the country’s capitalists to fully regain confidence that their interests will be valued and protected.

In the first eight months of this year, fixed-asset investment by the private sector, a gauge of private investor confidence, fell by 0.7 per cent, according to government data. That was way below the 7.4 per cent growth of fixed-asset investments by the state sector during the same period, but sentiment may improve in the coming months.