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China announces a 5% annual growth target

China has announced that its annual growth target would be 5%, a relatively modest target that has disappointed the market by the fact that Beijing has chosen to lower its growth prospects to 5%, instead of the 5.5% or more expected. This has been interpreted as a sign that large-scale stimuli are unlikely to occur.

Analysts at ANZ Bank note that “the difficult export environment and the current correction in the real estate market are the main obstacles for this year“. Meanwhile, it is likely that the Government Activity Report will also try to promote measures to encourage foreign investment in the country and trade. Details of key changes in senior management are also likely to be released. The session is also set to grant President Xi Jinping a third term in office and implement the biggest government reshuffle in a decade.

Global inflation remains high, growth in the world economy and trade is running out of steam, and external attempts to suppress and contain China are on the rise.“, declared the outgoing Prime Minister, Li Keqiang, during his opening speech in Parliament, which will last until March 13.

Source: Fx Street

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