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This is a recurring piece on the zeitgeist of domestic Chinese investors. For context, there are over 200 million local investors in China. They control around 85% of China A-share trading and 20% of Hong Kong market flows.
Today’s hot topics:
Central Economics Works Conference
Self-help for Covid Infections
Macro Data: Bad News is Good News
Investment Themes: Turnaround and Reopening
Central Economics Works Conference
Held annually in December, this conference offers high-level guidance and sets priorities for the economy. In terms of economic policy, many believe this is more important than the National People’s Congress (“Two Sessions”) in March next year.
The current Economics Works Conference is not much different from previous years’ meetings. Yet there are strong signs of China returning to pragmatism following a difficult year of fighting the virus. A result of the meeting, China vows to bolster the economy in 2023 with a “proactive fiscal policy” and a “prudent monetary policy.” The meeting raised the importance of the private sector in economic growth, including the real estate to Internet industries.
Don’t expect any specific measures from this meeting. This is not the occasion when China gives a to-do list. The tone-setting is important. China’s reiteration on “economic development (growth)” injects confidence into the market, which will likely respond positively on Monday.
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