After a year of intense planning and political maneuvering, China’s new leadersdon’t appear to have much to show for their efforts. The depressingly familiarstop-go cycle of fiscal and monetary stimulus remains entrenched, and eventhe debate about the direction of growth over the next 1-2 years is unresolved.
November’s Third Plenum – for which we still don’t have specific dates – couldchange this. While market expectations are muted, sinologists assure us all isgoing well.1 The meeting’s delay from its regular October schedule is indicativeof the difficulties involved but propitious; its 1993 version, when the partyenshrined Deng’s socialist market economy, proved the most consequential ofthe modern era. A lack of leaks implies that important decisions aboutprioritization and the scope of fiscal reform are going down to the wire.
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Deutsche Bank