China expected to keep policies steady in 2020 as growth slows

BEIJING China will keep economic policies stable while making them more effective in 2020 to help achieve its annual growth target, the Xinhua News Agency said after a meeting of top officials, as the economy has cooled amid a trade war with the United States.

The annual Central Economic Work Conference, a closed-door gathering of top leaders and policy-makers, is being watched by investors for any fresh policy steps to ward off a sharper slowdown in the world second-largest economy.

“In order to achieve the expected target for next year, we should prioritize stability. Macro policies will be stable, micro policies will be flexible, underpinned by social policies,” Xinhua reported on Thursday, after the meeting.

China’s economic growth cooled to a near 30-year low of six per cent in the third quarter and could slip further in the fourth quarter, although for the full year it remains on track to meet the government’s target of six per cent to 6.5 per cent.

Officials at Thursday’s meeting agreed to set a growth target of “around 6 per cent” for 2020, the Nikkei Asian Review reported, citing an unnamed source.

The Xinhua report, which outlined broad plans but few details, said: “We should improve macro policies to make them more forward-looking, targeted and effective.”

China would maintain its proactive fiscal policy and prudent monetary policy, making economic adjustments more forward-looking, targeted and effective, Xinhua said.

The economy faces increased downward pressure as the global economy slows and the government should be prepared for greater global risks, but China will keep its economic growth within a reasonable range in 2020, Xinhua said.

The government should “scientifically and steadily grasp” its counter-cyclical policy adjustments, while paying more attention to reforms to support businesses, Xinhua said.

“Apart from implementing the existing policies, some major counter cyclical adjustment policies, such as in manufacturing industry and infrastructure investment, will be further strengthened,” said Zhang Yi, economist at Zhong Hai Sheng Rong Capital Management.

The government has launched a raft of measures, including reductions in reserve requirements for banks, tax cuts and more infrastructure spending, but steps have yet to halt the economic slowdown.