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?”

Research Team at TDS, lists down the key takeaways from the National Peoples’ Congress held over the weekend.

(Market News Provided by FXstreet)

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