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China This Week: New Economic Policies Coming Down the Pipeline?

Dec 11 , 2017

China-experts and international commentators have their eyes and ears set on an important year-end economic conference happening in Beijing over the next few weeks, which is likely to yield important policy outcomes in the areas of GDP target-setting, poverty alleviation, supply-side reform and the management of economic risk. The Central Economic Work Conference, which is usually convened annually in December, is a meeting of key economic policymakers to set economic targets and policy goals for the coming year. 

Ahead of the meeting, the Politburo met to discuss key goals for 2018, and released a document (in English, in Chinese) which indicates that the government is interested in reducing risks in the financial system, reforming the housing system, reducing pollution, and focusing on "high quality" growth.

Wang Tao, head of China economic research at UBS Group AG in Hong Kong, predicts that the conference will result in "prudent and neutral" monetary policy stances, like last year's conference, rather than in potentially drastic measures. She believes that the government will set a slightly lower growth target for 2018, which would tie in with President Xi Jinping's "move away from the longstanding tradition of setting annual GDP growth targets for the Chinese economy," at the 19th Party Congress, as a China-US Focus contributor argued.

However, the current leadership will still have to balance its debt reduction measures with meeting the long term goal set by the previous administration of doubling GDP by 2020 to turn China into a "modestly prosperous" nation, while also keeping financial markets steady. A delicate task for the newly-minted leadership -- and one that comes at a time when China is facing many other economic challenges, including questions over its World Trade Organization "market economy" status and tensions with the Trump administration over its Sections 301 and 337 trade investigations. 

For the latest issue of China This Week, an exclusive weekly review and analysis of major trends and developments impacting the China-U.S. relations, please visit here.

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