CRU: National People's Congress 2019: The Year of Lower Growth and Modest Stimulus

LONDON, March 8, 2019 /PRNewswire/ -- This meeting marks the start of the most important policy meetings in China. They set the direction for the economy in 2019. The news today was broadly in line with our expectations, with the growth target for 2019 revised down supported by modest additional policy stimulus, in the form of corporate value added tax cuts. The policy stimulus is skewed towards small companies; and the manufacturing, construction and transport industries – making it mildly positive news for commodity producers.

The 13th National People's Congress (NPC), China's Parliament, began its annual two-week meeting on 5th of March. The NPC is arguably the most important policy meeting in China because it is when key macroeconomic targets are announced together with the policies required to support them. Here we set out our initial view and a full response will be available later this month.

This year's NPC has drawn attention given the US-China trade war, which has raised concerns about the pace of slowing growth in China, and the global economy more generally. The latter arising because China is the world's second largest economy, which has close trade and confidence links to many other economies in the world.

The important questions facing our clients are:

• Will economic growth in China slow below the growth rates we have seen recently?
• Will China de-emphasise its environmental and credit deleveraging policies?
• How much additional policy stimulus might we see in 2019 (as in 2008 and 2015)?
• Will the stimulus be positive for commodity markets?
• Is China "opening up" its market to foreign companies at a faster pace?

Growth target revised down to 6 – 6.5% in 2019

The Chinese economy grew by 6.6% in 2018, the lowest annual rate since 1990.

The growth target for 2018 was "about 6.5%". The growth target for 2019 has been revised down to the range "6-6.5%". This downgrade to the growth target was widely expected by the market, and it is in line with CRUs expectation and our global economic and industrial forecast.

Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2019/national-people-s-congress-2019-the-year-of-lower-growth-and-modest-stimulus/

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About CRU

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 280 experts and has more than 11 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004 and Singapore in 2018.

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