The readout from today’s Politburo meeting strikes a relatively dovish tone, suggesting that more fiscal support and monetary easing is on the cards next year. The leadership continues to highlight the importance of domestic demand in driving the economy, but still seems to be misdiagnosing its weakness as partially stemming from a lack of supply. And mention of price wars and involution-style competition was dropped in a sign that the leadership doesn’t believe overcapacity is as entrenched as we think it is.
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