China sets sights on ‘fully tapping’ domestic market potential after tone-setting meet

China has pledged to build a robust domestic market to counter external risks following a high-level policy meeting – a strategy that analysts say signals more pro-growth measures and a better balance between supply and demand.

The central economic work conference – an annual gathering of the Central Committee of the ruling Communist Party and the State Council, China’s cabinet – concluded on Thursday with a nationwide call to “strengthen our own capabilities to cope with external challenges”, according to a readout by Xinhua.

“We must fully tap our economic potential and must uphold both policy support and reform and innovation,” the nation’s top leadership said, according to the readout released on Thursday after the conclusion of the two-day conference, which typically lays out the broad fiscal and monetary agenda for the coming year.

“We must ensure that [the market] is allowed to operate freely while being well regulated, and must closely combine investment in physical capital with investment in people.”

The conference addressed a range of domestic challenges that the world’s second-largest economy is now facing, including a sharp contradiction between strong supply and weak demand, low price levels, “involutionary” competition and local governments’ financial difficulties, as well as medium- to long-term challenges such as an ageing population amid declining birthrates.

With China seen as largely staying on course despite rising external headwinds in 2025, next year is critical as it’ll be the first covered by China’s 15th five-year plan.