China to deepen economic reforms in 2015: Xinhua

BEIJING, Dec 5 (Reuters): China will pursue prudent monetary policy and pro-active fiscal policy next year, the ruling Communist Party's elite decision-making body was quoted as saying on Friday in a reiteration of the government's existing stance.

China will deepen reforms in the world's second-largest economy in 2015 as it tries to boost domestic demand and further urbanise the country, Xinhua quoted the politburo as saying.

Crucially, the politburo said China must balance the competing needs of stabilising and reforming its economy, a nod to an on-going debate about how it can stimulate its sagging economy without compromising its quest for change.

After 30 years of double-digit growth that lifted hundreds of millions from poverty but also polluted the air, land and water, China wants to remake its growth model into one that is greener and more sustainable.

The reform agenda was made more difficult this year by a cooling economy. China is experiencing its worst downturn in at least six years.

Indeed, after saying for months that China does not need any big stimulus, the central bank unexpectedly cut interest rates for the first time in over two years on Nov. 21 in a move that it described as being "neutral" for policy.

The 25-member politburo acknowledged the risks faced by the economy on Friday.

It said the economy was beset by difficulties and challenges that authorities needed to monitor, even though it noted that the Chinese growth engine remained in good shape.

Authorities will pay close attention to the labour market and work on reducing poverty, the politburo said, repeating the government's stance that keeping unemployment low is a priority.