China will enhance the strength and coordination of its macro policies in a bid to expand domestic demand and push for a high-quality growth in 2024, according to a statement of the annual Central Economic Work Conference chaired by President Xi Jinping on Tuesday which indicated the country would not introduce further big stimulus but focus on policy efficiency,

Economic challenges include insufficient demand, overcapacity, weak expectations, domestic bottlenecks and a complex external environment, the conference said, calling for policy makers to support fundamentals and stem risks from the property sector, local government debt and small banks.

The conference unexpectedly highlighted reform of the fiscal and taxation systems and required authorities to ensure fiscal sustainability and to target strategic spending, which may signal that fiscal expansion is only likely to be conducted at a modest pace. The top policy maker stressed that monetary policy should be “flexible, appropriate and targeted” and liquidity should be ample. Total social finance and M2 should “keep in line with economic growth and price expectations,” it said, in a statement released amid growing speculation over the risk of deflation. (See MNI: PBOC To Offer More Targeted Tools, Expand Balance Sheet)