China’s leaders are likely to convene this week to lay out their economic priorities for 2021, with analysts expecting a renewed focus on slowing the pace of debt growth and insulating the economy from tensions with the US, reported Bloomberg.
The annual Central Economic Work Conference follows a year in which China loosened fiscal and monetary policy in response to the coronavirus pandemic.
With Beijing satisfied that its control of the pandemic has ensured economic expansion this year, the meeting will provide clues on how rapidly the leadership will tighten policy against the backdrop of a sharp acceleration in debt and a string of company defaults. Financial markets have already been spooked by the policy shift, and any signal of an early move could weigh on market sentiment further.
Top of Beijing’s to-do list next year will be cleaning up the financial system after China’s debt ratio surged to a record level this year. China’s central bank recently indicated that it expects that ratio to stabilize at a “reasonable” level as the economy continues to recover, said Bloomberg.