Ahead of China’s key economic meeting, ‘risk of potential instability’ looms large in decision-making
- China’s Politburo highlights the central government’s concerns over weak investment and sluggish demand in the lead-up to its annual central economic work conference
- If slowdown in economic growth is worse than expected in 2022, authorities may expand monetary and fiscal policies and return to infrastructure spending
China’s economic planners are expected to switch their focus from financial discipline to gradual easing while boosting investment and consumption to fend off headwinds to growth, experts said ahead of the annual central economic work conference that may begin this week.
But analysts also warn that it would be premature to expect an abrupt end to property crackdowns and other financial speculations. Instead, a gradual easing would be designed to keep economic growth within a minimum stable range ahead of a major leadership reshuffle in October.
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For the first time, a statement following the Politburo meeting used the phrase “stability is the top priority”, said Larry Hu, chief China economist at Macquarie Capital, in a research note on Monday.