The analysis comes on statements out of an annual meeting of China's Central Economic Work Conference (this is a meeting that sets the economic agenda for the year ahead).
Analyst comments (in brief):
“The memo especially features the ruling party’s return to its long-term core principle of growing the economy since late 1970s,” Nomura’s chief China economist Ting Lu
- “The memo confirms that Beijing has undoubtedly shifted its policy focus to ‘growth stability’, as it faces mounting downward pressure on growth.”
Raymond Yeung, ANZ’s greater China chief economist, said he expected authorities to set a GDP growth target of around 5 per cent in 2022.
- He said the government’s emphasis on China’s flagging demand, along with supply shocks and rising negativity about the country’s economic prospects next year meant a larger amount of government policy support would be required. “The government will also accelerate fiscal spending but in a more targeted manner in the near term,” Mr Yeung said.
“In our view, strong policy easing, including interest rate cuts and strong fiscal stimulus, is unlikely in the near term. Strong fiscal stimulus, typically aimed at infrastructure projects, will likely increase leverage in property sector and further stoke upstream material inflation and counteract the decarbonisation goal,” Commonwealth Bank senior Asia economist Kevin Xi.
Info comes via an Australian Financial Review piece, here is the link for much more (may be gated) .
