The reports delivered at today’s opening of the National People’s Congress (NPC) confirm that with the COVID-19 downturn now in the rear-view mirror the focus of China’s leadership has shifted away from shoring up near-term growth towards putting the economy on a more sustainable and self-sufficient footing. The annual GDP target did make a comeback but at a level that is very unlikely to require fresh stimulus. To the contrary, the 2021 fiscal and monetary targets imply a clear withdrawal of policy support, setting the scene for a cyclical slowdown in economic activity in the coming quarters.
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