China skips Politburo readout as investors await stimulus clues
THE Communist Party’s elite decision-making body skipped releasing a readout for its regular November meeting, leaving investors hungry for signs of stimulus waiting for the conclusion of two major economic huddles this month.
The 24-man Politburo that President Xi Jinping leads appeared to have missed its huddle last month, the first time the group failed to publicly convene since May 2023. It’s the latest example of China’s top leader disrupting the party’s political calendar, after the Third Plenum on major reforms held in July was delayed by about a year.
Investors are now turning their attention to this month’s Politburo assembly – one of three annually to typically focus on economic policy, although Xi this year devoted an extra meeting to that cause in September. While such huddles normally take place at the end of each month, December’s meeting is typically brought forward to set up the Central Economic Work Conference.
That conclave usually convened in mid-December offers a blueprint for future monetary, fiscal and industrial policies, and draws cadres from government organs and state-owned enterprises to Beijing. While specific numbers settled on won’t be publicized until the annual parliament session in March, investors will scour the readout for hints of policymakers’ decisions.
Chinese stocks rallied last week, partly fuelled by rumors the work conference will start earlier than expected and set a higher-than-usual deficit target for 2025.
Last year, the work conference – held from Dec 11 to Dec 12 – amounted to a letdown for investors seeking signs of greater stimulus, with top leaders instead pledging to make industrial policy the main economic priority. Xi also publicly skipped attending half of that key annual economic meeting for the first time, according to public records.
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Investors this year are betting Beijing will unlock more forceful measures to bolster growth as the world’s No 2 economy braces for the return of Donald Trump. The US president-elect has made two tariff threats in the past week alone, most recently saying he’ll hit the so-called Brics group of nations, to which China belongs, with a 100 per cent tariff if they create a new currency to rival the US dollar.
Chinese policymakers have taken an array of steps since September to put a floor under the country’s growth slowdown, including rate cuts, more cash for banks and a US$1.4 trillion program to steady the finances of local governments. Another cut to the amount of cash banks must keep in the reserve is widely expected this year.
Missing statements
Since China’s most-powerful leader since Mao Zedong secured a precedent-defying third term in late 2022, the Politburo has skipped publishing a statement for four separate months – more than the three missed in the Chinese leader’s second term. That comes as officials increasingly restrict access to sensitive data, especially when it’s unflattering to the nation’s faltering economy.
While Politburo readouts tend to be formulaic, they provide a rare glimpse into the operations of the secretive body that gathers behind closed doors and publishes no schedules or agendas. Changes in tone and broad pledges can be enough to send stocks rallying or plunging.
There is no public mandate for the Politburo to meet monthly, but it has done so for 90 per cent of Xi’s decade-plus tenure, according to a Bloomberg News analysis of government statements. It is unclear whether the Politburo failed to convene in November, or if the elite group discussed sensitive matters it didn’t want to reveal.
It’s also possible for state media to later release statements on the body’s activities. Sometimes the party releases transcripts of Xi’s remarks months, or even years, after the fact. The Politburo however, has never missed a readout from the April, July and December sessions focused on economic policy during Xi’s tenure. BLOOMBERG
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