CEWC signals limited stimulus but some rebalancing

The readout from China’s Central Economic Work Conference suggests that monetary and fiscal policy will remain supportive next year but that any additional easing will be modest. Instead, the focus appears to be on making better use of government spending which should support, at the margins at least, a shift in domestic demand toward consumption. While we doubt this will drive a recovery in growth next year, it could provide a foundation for a healthier and more balanced economy over the medium-term.