Its a symbolic thing. 2021 is going to be the 100th anniversary of the Chinese Communist Party.
Here's Stan Chart on what to expect from China in 2020 and into 2021:
- government is unlikely to drop the target of doubling 2010 GDP by 2020
- This requires minimum growth of 6.1-6.2% in 2019-20
- The government has pledged counter-cyclical policies to offset the headwinds. We estimate that higher US tariffs will reduce China's 2020 growth by 0.3ppt with the achievement of a 'phase one' trade deal and by 0.6ppt in a 'worse-case' scenario
- The broadly defined budget deficit is likely to remain at around 6.5% of GDP
- mix of fiscal stimulus shifting from tax cuts to spending
- PBoC may keep credit growth slightly above nominal GDP growth, cutting the reserve requirement ratio (RRR) and de facto policy rates
- "The switch to re-leveraging in 2019 from deleveraging in 2018 may turn out to be a key support for 2020 growth. In addition, we expect infrastructure investment to edge higher on fiscal stimulus; the industrial inventory cycle to bottom out; car sales to be less of a drag; and last but not least, a positive leap-year effect."
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Despite the negative effects of the trade war China has plenty of levers to opull, and they will. Not all bad news ahead of China-proxy trade.
