China: Growth focus on People's Congress in March – Nordea

Nordea Markets analysts suggest that China will announce its official growth target for 2020 only in conjunction with the People's Congress in March.

Key Quotes

“The media has reported, however, that the target will be lowered slightly, to around 6%. The high-level annual work conference on the economy emphasised in December that the policy stance will keep supporting stable growth.”

“A part of the 2020 quota on local government special bonds to fund infrastructure projects was brought forward in November and financial requirements on infra projects were also lowered as another way to boost investments. Because the tolerance to shadow-banking growth remains low, however, we do not expect the overall financing conditions to improve dramatically.”

“We still expect a slightly looser monetary policy, and only yesterday we saw another small step in that direction when the 14-day reverse repo rate was cut by 5 bp.”