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China economy

5 things to know about China’s Central Economic Work Conference as policymakers plan US trade war fightback

  • Annual meeting of top officials begins at Jingxi Hotel in Beijing on Tuesday and will discuss the economic policy for next year
  • Measures to address impact of ongoing tensions set to be high on the agenda for the likes of President Xi Jinping, Premier Li Keqiang and Vice-Premier Liu He
PUBLISHED : Tuesday, 18 December, 2018, 2:33pm
UPDATED : Tuesday, 18 December, 2018, 3:02pm

WHO

The Central Economic Work Conference (CEWC) will be attended by the likes of President Xi Jinping, Premier Li Keqiang and Vice-Premier Liu He.

Financial regulatory officials, economic planners and provincial governors will also attend.

This includes heads from the National People's Congress, Chinese People's Political Consultative Conference, High Court, Supreme People's Procuratorate, state-owned enterprises, financial institutions and the People's Liberation Army.

In theory, it will be attended by all 204 members of the Communist Party’s Central Committee and 172 alternative members as well as a selected list of invited delegates.

WHEN

On Tuesday, China’s senior policymakers begin setting out the government’s economic policy direction for next year, immediately after the ceremony celebrating the 40th anniversary of the country’s reform and opening up initiative.

The meeting is expected to last two days.

Economic policies discussed at the conference will be summarised in a report released by China's state-owned Xinhua News Agency once the meeting has finished.

Specific instructions will be then passed internally to government ministries as well as provincial and local administrators in the following two months to ensure proper implementation.

WHERE

The CEWC takes places at the Jingxi Hotel in Beijing.

The army-run hotel, 3km west of the Communist Party headquarters of Zhongnanhai, is the regular location for the CEWC.

The hotel is run by the Chinese military and therefore does not allow walk-in customers, with security around the hotel dramatically increasing during the CEWC.

WHAT

The annual CEWC discuss the economic policy for next year. The actual targets will be announced in the Premier’s speech to the National People's Congress on March 5 as part of the ‘Two Sessions’, which is the annual meetings of the national legislature and the top political advisory body.

Policymakers are expected to discuss ways to stabilise the domestic economy, an urgent task as the trade war with the United States is taking a rising toll on growth.

They are expected to consider more measures to stimulate growth while lowering their headline growth target for next year.

For example, the general consensus among Chinese financial institutions is that the CEWC will announce a government budget deficit that is higher than this year’s target of 2.6 per cent of gross domestic product to allow for more fiscal spending and a bigger tax cut than the 1.2 trillion yuan (US$174 billion) reduction implemented this year.

At the 2017 CEWC, the government set the tone for a deepening of supply-side structural reforms, while focusing on three key tasks for 2018: reducing risks in the financial system, controlling pollution and alleviating poverty.

The first two tasks have been shelved, for the most part, due to the escalating trade war.

WHY



This year’s agenda for the meeting will be dominated by the question of how to respond to the rising damage being done to the domestic economy by the trade war with the United States.

Policy priorities that Beijing sets will be closely watched by the Chinese public, who are increasingly concerned about the impact of the trade war on their personal finances and jobs.