7 Mar 2016
China: Growth target lowered from “about 7%” to 6.5-7% - TDS
Research Team at TDS, lists down the key takeaways from the National Peoples’ Congress held over the weekend.
Key Quotes
1) Growth target was lowered from “about 7%” to 6.5-7% (maintain 2016-2020 growth target at 6.5%) and the new urban jobs target at 10mn was in line with expectations;
2) Fiscal easing - the government’s plan is to increase infrastructure and social spending, pushing the budget deficit to 3% of GDP (some were expecting more, closer to 4%);
3) Pursue SOE reform by addressing zombie firms through mergers, bankruptcies and debt deals;
4) keep monetary policy accommodative (use ’’full range of monetary policy tools’), the government targeting a 13% growth rate for M2 and Total Social Financing;
5) Tax and credit policies to be aimed at supporting ‘reasonable’ housing demand;
6) Keep yuan rate at a “reasonably balanced” level. Is that ~6.50?”
Key Quotes
1) Growth target was lowered from “about 7%” to 6.5-7% (maintain 2016-2020 growth target at 6.5%) and the new urban jobs target at 10mn was in line with expectations;
2) Fiscal easing - the government’s plan is to increase infrastructure and social spending, pushing the budget deficit to 3% of GDP (some were expecting more, closer to 4%);
3) Pursue SOE reform by addressing zombie firms through mergers, bankruptcies and debt deals;
4) keep monetary policy accommodative (use ’’full range of monetary policy tools’), the government targeting a 13% growth rate for M2 and Total Social Financing;
5) Tax and credit policies to be aimed at supporting ‘reasonable’ housing demand;
6) Keep yuan rate at a “reasonably balanced” level. Is that ~6.50?”