China's economy on the eve of the Party Congress
China is holding its party congress starting October 18th. While statements are likely to remain vague, the symbolic value of the meeting carries great weight. The meeting will reveal both more information about Presidents Xi’s own priorities and a better gauge of where Chinese economic policy is heading. By Hans Bevers and Michiel Verstrepen.
What are the highlights of China’s economy on the eve of the 19th party plenum?
- President Xi looks set to consolidate his position while setting out the policy direction for the next 5 years.
- The key challenge will be reconciling goals of achieving high growth targets while the same time making sure financial stability remains in place.
- Economic activity is holding up well at this stage supported by a global cyclical upswing and stimulus measures. However, stimulus effects will wane and monetary policy remains relatively tight.
- Longer-term outlook remains challenging against the back of an ageing population, less scope to benefit from productivity catch-up and pressure on external competitiveness. A sharp slowdown would impact the regional and global growth outlook.
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