LONDON, March 8, 2019
LONDON, March 8, 2019 /PRNewswire/ -- This meeting marks the start of the most important policy meetings in China. They set the direction for the economy in 2019. The news today was broadly in line with our expectations, with the growth target for 2019 revised down supported by modest additional policy stimulus, in the form of corporate value added tax cuts. The policy stimulus is skewed towards small companies; and the manufacturing, construction and transport industries – making it mildly positive news for commodity producers.
The 13th National People's Congress (NPC), China's Parliament, began its annual two-week meeting on 5th of March. The NPC is arguably the most important policy meeting in China because it is when key macroeconomic targets are announced together with the policies required to support them. Here we set out our initial view and a full response will be available later this month.
This year's NPC has drawn attention given the US-China trade war, which has raised concerns about the pace of slowing growth in China, and the global economy more generally. The latter arising because China is the world's second largest economy, which has close trade and confidence links to many other economies in the world.
The important questions facing our clients are:
Growth target revised down to 6 – 6.5% in 2019
The Chinese economy grew by 6.6% in 2018, the lowest annual rate since 1990.
The growth target for 2018 was "about 6.5%". The growth target for 2019 has been revised down to the range "6-6.5%". This downgrade to the growth target was widely expected by the market, and it is in line with CRUs expectation and our global economic and industrial forecast.
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