China: National People’s Congress is more than growth targeting - ANZ

Analysis team of ANZ is believing that China will announce an aggressive growth target of ‘around 6.5%’ for 2019, at the 70th anniversary of the People’s Republic of China.

Key Quotes

“Policymakers believe market stability and structural reforms will drive growth. We expect the government will announce a VAT rate cut, a deficit budget of 2.9% of GDP and emphasise city cluster development.”

“In addition, we will focus on the annual quota of the special local government bond (SLGB) issuance, which is likely to be lifted by 60%.”

“The PBoC will maintain a low interest rate environment primarily through reduction of reserve requirement ratio. To maintain policy prudence, the central bank is unlikely to cut the benchmark lending rate and 7-day reverse repo rate, unless there is a change in the US interest rate cycle.”