What does Xi’s meeting with entrepreneurs signal for the private sector?
Special points to highlight in this report:
- Economic data releases in China tend to be skimpy in the first two months of every year, mainly because the floating Spring Festival date (from late January to mid-February) distorts economic activity and makes year-on-year and month-on-month comparisons hard to sustain. However, both the CPI inflation data and the financing data suggest a stronger-than-expected start to the year. What is more, in some parts of the country the property market may have bottomed out.
- The most important recent event, however, was Xi Jinping’s participation in a “high-level” meeting with private-sector business leaders and entrepreneurs, in which he promised to support the private sector. This was widely seen as a confidence-building signal to a beleaguered and depressed private sector.
- The longer-term impact of the meeting depends crucially on whether one believes that China’s current economic malaise is the consequence or the cause of the very low household and business confidence that afflicts the Chinese economy.
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