China’s lower-level officials need incentives to take risks and spur growth but they also need to set a frugal example, according to a statement released on Friday after an annual top economic conference.
The balancing act was discussed at the central economic work conference, a gathering of the Communist Party elite in Beijing on Thursday to determine the overall tone for government action and the economic agenda for the coming year.
Chaired by President Xi Jinping, the conference reflected concerns that official inertia and red tape is hindering the country’s economic recovery.
China is facing slowing growth and rising debt levels amid wide-ranging competition with the United States.
To inject new life into the economy, Beijing plans to raise the fiscal deficit ceiling, issue more treasury bonds, cut interest rates and reduce the reserve requirement ratio.
But local government officials must be incentivised and unburdened to effectively execute the central government’s economic agenda and policy changes, according to the conference statement.