ING GDP forecasts for China:
- -0.4%y/y for Q4 2022
- 2.06% for the whole of 2022
- 4.3% for 2023
ING (in brief) comments on the Work Conference:
- key takeaway from the Work Conference is that the government wants growth via domestic consumption, and this will be the top priority in 2023.
- New-energy car and elderly services will enjoy preferential policies.
- policies will be tilted to support research and production of technology services and products.
- The two key differences next year will be living with Covid and supporting real estate developers. The first of these is already in progress. The latter is tricky. The government's intention is not to let the real estate sector increase financial risk. But too much policy support for developer's financing could end up with another round of over-leverage.
- The main tools for growth will be fiscal stimulus and stable monetary policies. We expect there will be a fiscal deficit of around 8% of GDP next year. But monetary policy will be similar to this year, meaning that there could be a couple of RRR cuts, rolling over a re-lending program to help SMEs and the real estate sector, together with a couple of 10bp cuts in 7D reverse repo as well as the 1Y medium lending facility rate.
- More solid policies will be announced in March
