In a year like no other, Chinese economy emerges stronger from unprecedented virus test

SAFE AND SOUND GROWTH AHEAD

For small and medium-sized businesses -- the main drivers of job creation -- debt and uncertainties remain major challenges.

Xu said he expects macroeconomic policies to continue to focus on protecting market entities and boosting employment next year, which is crucial to stabilizing households' income expectations and increasing their willingness to buy.

"Extraordinary measures should be phased out in 2021 instead of an abrupt exit," Xu said.

In its third-quarter monetary policy report, China's central bank pledged to make its prudent monetary policy more targeted and flexible to adapt better to the needs of high-quality development and put more focus on the efficiency of financial services to support the real economy.

Morgan Stanley predicted that policymakers will likely normalize credit growth and its fiscal stance next year with a full recovery in the labor market and deployment of COVID-19 vaccines, according to its November report.

Noting that 2021 will be an especially important year for China in advancing modernization, a meeting of the Political Bureau of the Communist Party of China Central Committee on Friday called for sound and precise implementation of macro policies, keeping the economy running within a reasonable range and adhering to the strategy of expanding domestic demand next year.

Reforms on both supply and demand sides should be carried out to achieve a dynamic equilibrium on a higher level, in which demand and supply can boost each other, the meeting said.

"China's overall economic efficiency has improved in recent years due to supply-side structural reforms. As the country will deepen reforms on both supply and demand sides in years to come, the economy will see greater growth potential," Zhang said.