Initial thoughts on the National People’s Congress

China’s retention of an “about 6.5%” growth target for GDP in 2018, while expected, undermines the argument that growth is being demoted as a central policy concern. Growth is likely to slow we believe, not least because the finance ministry is today projecting unusually-sharp policy tightening. But the desire to sustain rapid growth implies that, when that happens, stimulus will resume, most likely in the form of interest rate cuts.