China’s top leadership is assembling for a high level two-day conference on the economy beginning Wednesday, says a CNBC report.
The meeting to be chaired by President Xi Jinping, is a closed door event with the focus on economic performance and policy implementation in the current year, while setting priorities for the coming year.
Reports say the event is yet to be made public in China and going by past practice, a meeting of the politburo is also held prior to the economic talk fest.
The coming year is a major concern in China given that President-elect Donald Trump is to take over on Jan 20, and has threatened to impose a 10% tariff on Chinese goods until they do more to stop the trafficking of the addictive narcotic fentanyl.
Another 60% tariff could also be imposed on Chinese imports, which is what he has repeatedly warned during his election campaign.
Economists were quoted in the CNBC report as saying that the last is likely “a tactic to push China to the negotiation table”.
The report quoted Barclays economists as saying that eventually Trump will impose only 30% tariffs, which could still drag China’s growth by 1%. That would force China to stimulate domestic demand to offset the loss in exports, underscoring that relying on exports and manufacturing can no longer deliver the annual 4 to 5% growth over the next decade.
China needs to boost domestic consumption, create more employment and increase the income of workers as well as ensure low-income groups are given the help they need. Economists, according to the CNBC report, say that household consumption must hit 50% of GDP.
All in all, China has a set of challenges before it which the leadership has to address. The report says there could be focus on the needs of local governments, ensure they have the proper guidance to deliver on growth targets.
The report says China is expected to keep its growth target for next year against at around 5%, the same as the current year if not lower.
