The China National People’s Congress kicks off today and the five-year growth targets and plan are out, with Reuters obtaining a copy.
2026 GDP target set at 4.5% to 5%CPI target set at around 2%Growth rate set for ‘reasonable rate’ for the next five yearsWill set 2026 budget deficit at 4% of GDPPlan will stick to strategic aim of expanding domestic demandWill implement more proactive fiscal policyUnchanged quote on local government special bondsWill set up efforts to improve people’s livelihoodsAims to achieve greater self-reliance and strength in science and technologyWill address risks from real estate, local gov’t debt, small and medium local financial institutionsWill make fiscal policy play a positive role in boosting consumption and expanding investmentAims to realize a ‘notable’ increase in household consumption as a share of GDP
The headline here is the more-proactive fiscal policy but the market isn’t going to take that at face value as we’ve heard it many times before without any resulting jump in growth numbers or consumption. So they’re hitting all the right notes but the market isn’t going to be easily convinced that the symphony has a better conductor.
Markets would really like to see some strong actions to end the malaise in the economy but that just hasn’t been Xi’s style.
This article was written by Adam Button at investinglive.com.