In March, China’s elite gathered in Beijing for the annual “two sessions” meeting of China’s legislative bodies, the National People’s Congress (NPC) and the People’s Political Consultative Conference. While much of what happens at the two sessions is at best marginalia for all but the most dedicated of China watchers, the key themes of the meeting and the government Work Report that outlines policy, priorities and targets for the coming the year, are worthy of attention. As expected, the overall direction follows the 13th Five Year Plan released back in 2016: coordinated “innovation-driven development”, environmental protection and plenty more “opening up”. But as always with Chinese policy documents, the devil is in the detail. Slower growth over more debt That economic growth will continue to slow is hardly a surprise. But this year’s target of 6 – 6.5% offers more leeway than last year’s target of around “6.5%”. This is recognition of the uncertainties facing the economy in 2019, from domestic risks in the financial sector and excessive local government debt to uncertainty around the global outlook and trade tensions with the US. The government does not want short-term growth if that means a buildup of debt that could pose… continue reading
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Source: CTRM Center