Image Source : China Visual

BEIJING, January 18 (TMTPOST) —— China is still in the stage of rapid urbanization, and huge demand potentials will provide strong support for the development of the real estate industry, according to the speech made by Vice Premier Liu He at the World Economic Forum 2023 Annual Meeting on Tuesday.

Liu pointed out that the recently-concluded Central Economic Work Conference made arrangements for 2023 work relating to the Chinese economy. China will adhere to seeking progress while maintaining stability, continue to implement a proactive fiscal policy and prudent monetary policy, and strive to maintain reasonable economic growth.

In the past decade, China's GDP has increased from 54 trillion yuan ($79 trillion) to 121 trillion yuan ($17 trillion). Liu believes that China must stick to socialist market economy reform. "Some people say that China wants to develop a planned economy, but that is impossible," he said.

Liu also introduced the situation of preventing and defusing financial risks in China, especially those related to the real estate industry. He believed that some financial risks in China in the past five years were mainly caused by factors such as macroeconomic downturn, lax financial regulation, blind expansion of business entities, and insider control.

After years of hard work, China's financial system has remained sound without systemic risks on the whole. China is formulating a Financial Stability Law to provide a legal guarantee for defusing financial risks and maintaining financial stability in the next step.

Given risks in the real estate sector, China will strive to stabilize expectations, improve the liquidity of property developers, relax regulatory measures during the period of overheating, and expand effective demand.

As for the current inflation problem, Liu believes that this round of inflation has complex causes. In addition to the demand side, efforts should be made to repair the industrial chain and supply chain simultaneously, and attach great importance to energy security and food security. This requires promoting international cooperation and maintaining peace to jointly address common challenges.