(Yicai) April 29 -- China’s top leadership has pledged to fully and effectively use economic policy to support growth, prioritizing employment, artificial intelligence, domestic demand, and the property market, against a backdrop of external uncertainty.

Yesterday’s meeting of the Politburo -- the top decision-making body of China’s Communist Party -- called for further optimization of fiscal spending, safeguarding the “three guarantees” at the grassroots level (basic livelihoods, salary payments, and normal government operations), maintaining ample liquidity and a stable currency, and better consistency checks across policies.

The meeting comes after data showed China’s economy grew 5 percent in the first quarter from a year earlier, 0.5 percentage point faster than in the prior quarter. The surveyed urban unemployment rate stood at 5.4 percent last month, close to the 5.5 percent policy target.

Policymakers do not need to roll out all additional policy measures at once, Zhang Jun, chief economist at China Galaxy Securities, told Yicai, noting that they should preserve room for maneuver and policy flexibility.

The Middle East conflict has ramped up global economic uncertainty, and steadying expectations, employment, and markets will be key signals for any broad interest rate cuts, Zhang added.

The Politburo also stressed the need to beef up the jobs-first policy and improve public services such as education, healthcare, and childcare, as well as boost domestic demand and speed up major infrastructure projects. In addition, it called for stabilizing the real estate market and advancing urban renewal, while pushing forward the “AI+” initiative to foster new forms of intelligent economy.

Amid the transition to new growth drivers, imported inflation pressures and efficiency gains from AI are reshaping corporate labor needs, Zhang said. With a record 12.7 million college students expected to graduate this year, employment pressure remains elevated, making the surveyed jobless rate a key indicator for further policy support, he said.

Furthermore, the Politburo called for expanding the supply of high-quality goods and services, upgrading consumption, and advancing the construction of key infrastructure, including water systems, new power grids, computing networks, next-generation communication networks, underground urban pipelines, and logistics networks. Projects that are ready should begin construction work promptly.

Some projects lack sufficient reserves and have low commencement rates, pointed out Wen Bin, chief economist at China Minsheng Bank. He expects fiscal fund disbursement and the use of special purpose bonds to speed up, with the aim of quickly turning paper plans into tangible work, while government investment helps attract social capital and offset weakening property and private investment.

On industrial policy, the Politburo proposed fully carrying out the “AI+” action plan, fostering new intelligent-economy business models, and improving AI governance. It also stressed the need to preserve an appropriate share of manufacturing and to intensify efforts against “involution-style” competition.

Involution-style competition is a self-defeating cycle of ever-intensifying competition in key sectors that results in diminishing returns. A national "anti-involution" campaign has been underway since last year.

Editor: Emmi Laine