China policy – what to watch for at the People’s Congress

March 2, 2018

MELBOURNE – Australia’s ANZ Bank has nominated what it sees as the key points for markets to watch out of China’s 19th National People’’ s Congress. It says -

A new Government line-up will be made public after the meeting. Liu He, a heavy-weight economic adviser to President Xi Jinping, could assume a formal role in the State Council, formulating major economic and financial policies.

Premier Li Keqiang will announce multiple annual economic targets. We pay particular attention to how monetary policy is perceived from the lens of growth in money supply. A low M2 growth target (around 10% or even below) will indicate a tight monetary policy stance amid intensive debt reduction efforts.
Financial market reforms featuring deleveraging and the opening up of markets to foreign investors will likely top the policy agenda. Other reforms in State-owned sectors, the property market, further liberalisation in trade sector and industrial upgrading may also be key areas to watch. The terms of ‘Reforms’ and ‘Open up’ look set to be added into China’s Constitution as part of President Xi’s agenda. We believe the upcoming reform agenda will last for an extended period. (ATI).