China moves from zero coronavirus to growth – Central Economic Work Conference to start on 15th – Bloomberg

China’s sudden end to its “zero-corona” policy to curb the spread of the new coronavirus has added to the uncertainty surrounding an already fragile economy.

Economists expect the Central Economic Work Conference, hosted this week by Chinese Communist Party leader Xi Jinping, to ease fiscal and monetary policy to support economic growth. At the same meeting, policy targets for next year will be determined, and it is likely that the GDP growth rate target will also be discussed, but the announcement will be made at the National People’s Congress in March next year done.

After the party’s convention in October this year, the party’s Central Politburo was overhauled, and Mr Xi, who entered an unusual third term, confirmed Politburo members with close aides. The Politburo announced last week that it would aim to improve the economy next year.Published.

Christopher Bedder, deputy director of China research at Gabkal Dragonomics, said that this year’s Central Economic Work Conference “will give the first real indication of what the leadership envisages for economic policy after the withdrawal of the zero policy -corona back.” “It will probably mark the beginning of a new chapter in economic policy-making,” he said.

The Central Economic Work Conference, which is likely to start on the 15th, is expected to be attended by Politburo members, local government officials and heads of government and financial institutions. It usually lasts three days, at which time the state media will issue a statement. The main issues likely to be discussed are:

GDP target

Officials are considering setting an economic growth target of around 5% next year, a relatively high target which encourages local governments to move away from coronavirus restrictions to boost the economy.claim

According to a Bloomberg survey of economists, China’s Gross Domestic Product is expected to grow 4.9% in 2023 from the previous year, but the outlook has become uncertain due to a surge in coronavirus infections following the cancellation of the zero-corona policy.

Growth is expected to grow 3.2% this year, the slowest since the 1970s, not counting 2020, when the coronavirus pandemic collapsed the world.

Fiscal and Monetary Policy

The Politburo said last week it would implement a “strong and targeted” monetary policy, aiming for an aggressive fiscal policy next year. Analysts in China have called on the central government to issue more general bonds and reduce the debt burden on local governments to stimulate growth.

Goldman Sachs Group Inc. said. that China’s budget deficit has widened to 3.2% of GDP in 2023 from 2.8% this year, prompting local governments to issue 4 trillion yuan ($79 trillion) in new special bonds. We anticipate that it will be issued.