China's government has sounded a sanguine note about GDP growth at the close of its Economic Work Conference. Monetary policy will remain "prudent" and fiscal policy "proactive" in 2014. In practice, these labels don't mean much. But with policy continuity the watchword, the government is signalling that its attention will be on reform.
Perhaps most significant is the mention of a need to deal with local government debt. Alongside further financial sector liberalisation, budgetary reform is now at the topic of the reform agenda. Local governments are likely to face greater oversight of borrowing in future, limiting their ability to stoke local growth and helping to reduce over-investment.
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