BGA’s China team wrote an update on what to expect at a key upcoming official China economic conference. The update addressed the upcoming policy priorities for companies to monitor as well as how they may be impacted by the evolving political and economic environment.

Context

  • China’s Central Economic Work Conference is expected to commence to set the tone for next year’s policy priorities, amid reports of delays amid the country’s ongoing COVID-19 situation.
  • The CEWC is an expanded meeting of top leaders from the Chinese Communist Party’s Central Committee and ministerial leaders from the State Council who normally meet every December.

Significance

  • The meeting rarely deviates from established political and economic priorities, and only provides general targets and guidance for fiscal, monetary, trade and technological policy and development.
  • 2023 is different, with the focus now on how the leadership will address the chaotic dismantling of what had been strict COVID-19 control measures that had already put a drag on the economy. The meeting will not be able to address such a wide range of topics and the specifics of managing reopening all at once in a convincing manner. It is likely that the meeting will take a positive tone about the pace and impact of reopening despite the current uncertain picture.

Implications

  • Because of the sudden increase in infections, growth is likely to remain anemic through the first quarter of 2023. With growth already faltering, the CEWC is expected to express a commitment to prop up domestic consumption demand and speed up reopening ahead of the “two-sessions” government meetings in early March. If the reopening does not go well, the government will be hard-pressed to put the genie back in the bottle.
  • The government will also look to address the ongoing debt issues plaguing its property sector, which was once a major source of investment and growth. It is now contracting and must be stabilized and revived to maintain overall growth.

We will continue to keep you updated on developments in China as they occur. If you have any comments or questions, please contact BGA Advisor Eric Wang at ewang@bowergroupasia.com.

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Advisor

Eric has over two decades’ experience in government affairs and public relations and currently serves as firm partner and managing director of Yuan Associates. He has worked with more than 80 clients in manufacturing, agriculture and food, consumer goods and service industries. Eric joined Yuan Associates in 2005 and become a partner and managing director in 2011. As managing director, he is responsible for comprehensive government affairs service for and management of clients. As a partner his responsibilities include overseeing the firm’s daily overall operations. Prior to joining Yuan Associates, Eric worked as an account manager for Euan Barty Associates ... Read More