China's leaders since 2015 have given their strongest signal that growth in the world's second largest economy could slow down – and that they are ready to change policy if trade or financial risks threaten a sharp slowdown.
Hard work This demand must be met in an increasingly complicated geopolitical situation, according to a statement released on Monday following a Politburo meeting chaired by President Xi Jinping. Although growth remained robust in the first quarter, forecasters still see a slowdown in the economy this year as US trade tensions and the cleanup campaign continue to be the downside.
As the Politburo said, domestic demand must be strengthened For the first time since 201
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"There is a deep sense of risk underlying the calm surface, and the attitude of leadership has changed greatly" Deng Haiqing, Chief economist at JZ Securities Co. in Beijing, wrote in a note. "The attention given to stabilizing economic growth is the largest since 2015."
While trade tensions with the US have slowed, the statement suggests that leaders are preparing to anticipate potential economic turmoil. US Treasury Secretary Steven Mnuchin hinted at a ceasefire on Saturday in Washington, saying that he was considering a trip to China and was "cautiously optimistic" about bridging trade-related issues.
"Against the background of uncertain trade and investment tensions In the US, the Chinese government has realized that it is difficult to achieve the given growth target," said Xu Jianwei, a leading Chinese economist at Natixis SA in Hong Kong. "This is a significant, but not a slight change in tone."
Economists surveyed According to Bloomberg's forecast, growth this year will be around 6% Slow down 5 percent, which is the government's goal, and then slow down further for the next two years. The expansion increased in 2017 for the first time in seven years and accelerated to 6.9 percent.
Leaders demanded "bolder reform and opening efforts, as well as the timely implementation of key opening policies," the official Xinhua News Agency reported. They also said China needs to cut corporate financing costs.
As tensions with the US intensified over the development of high-tech industries from biotechnology to robotics, the Politburo also called for breakthroughs in the development of core technologies and support for new industries and businesses. China's People's Bank lowered its reserve ratio (1965-9017) last week and said the move was to make up for potential disruptions to liquidity and continue lending to the economy. Policy makers have also pointed out in recent months that a planned tightening of fiscal policy still leaves room for maneuver to respond to macroeconomic developments.
The tone of the Politburo meeting and the RRR cut point to a "preventative fine-tuning of the pace of tightening" due to external uncertainty over trade volatility and the unexpectedly sharp slump in general credit growth in the first quarter, according to a report by Robin Xing , Chief economist China at Morgan Stanley in Hong Kong.
"The focus of the Politburo meeting on boosting domestic demand and lowering funding costs for the real economy has confirmed that the government is worried about However, according to Larry Hu, head of the China economy at Macquarie Securitie, it is still too early to address official concerns as a clear indication of the direction of the policy, according to Meng Xiangjuan, an analyst at SWS Research Co. in Shanghai
to read in Hong Kong.
"I would not read it as a sign of the stimulus," said Hu. "The phrase" Promote domestic demand "is a response to the recent US-China trade dispute. China may admit this time, but such a trade dispute could be the new normal in the future.
– With support from Kevin Hamlin, Miao Han, Ling Zeng and Yinan Zhao