China's shift to pro-growth

With China’s Politburo confirming fiscal policy will be more proactive, and that prudent monetary policy will be more flexible, the authorities in China have signalled that the shift for policy is towards pro-growth and away from virus defence and containment. This will be met with stronger stimulus and more targeted measures.

The Politburo meeting on February 21st vowed to achieve growth targets and the social development milestone. Fiscal policies are going to be more proactive and monetary policy, which has already been eased, will be more flexible.

President Xi said authorities will step up policy adjustments to achieve the nation's economic and social goals while fighting the virus outbreak.

Targeted measures are going to be aimed at expanding demand and accelerating investment with a likely focus on industries like bio-medicine, medical equipment, and the 5G network.

Industrial production will also be a focus, with the goal of restoring business operations as quickly as possible. There will also be continued support for the worst impacted sectors such as hotels, restaurants, transport and tourism.

The meeting also puts focus on the priority of helping major firms with a key role in the global supply chain to restore production in order to lessen any potential blow to global suppliers.