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China Politburo Send Assurances on Growth and Reform

China’s authorities, mindful of the risk of a sharp economic slowdown that could derail their reform efforts, sent their clearest signal yet that they will safeguard growth and tweak policy when necessary.

The message from a meeting of China’s top decision-making body, the Politburo, sought on Tuesday to dispel market concerns about China’s near-term economic outlook by stressing stability of growth.

The main economic planning agency followed on Wednesday with assurances that this year’s growth goal was safe and that the authorities would supply markets with relatively ample funding.

“We believe the message here is that stability is highlighted after the unnecessary chaos in the interbank market in June, while the party still sends a signal that the new leadership is reform-minded despite some recent confusion,” Bank of America Merrill Lynch analysts said in a note.

The nation’s new leadership has pledged to wean China off its addiction to export and credit-fuelled heady growth in favor of one driven more by consumption, making clear it would accept some slowdown as a consequence of such a transition.

via Reuters [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza