Chinese policymakers are set to convene at....>

CHINA: Chinese policymakers are set to convene at the Chinese Communist Party

Central Economic Working Conference over the next couple of weeks or so (no

formal date announced), where they will set China's economic targets for 2020.

There are a few points to focus on here (among many other areas of interest):

- GDP Target: 2019's target was set at 6.0-6.5%., many sell-side analysts expect

a target of "around 6.0%" for 2020, with the trade war, structural slowdown,

targeted easing (both fiscal & monetary) & credit clean up adopted by

policymakers in recent times seen as the main contributors to the slowdown.

- CPI Target: Will the 3.0% goal (ceiling) be moved in light of the surge in

pork prices (well documented on the back of the African swine fever outbreak)?

Hard to tell as core CPI remains subdued (~+1.5% Y/Y in October).

- Fiscal deficit target: Will the 2.8% goal be lifted, to say 3.0%? Once again,

hard to say. China wants to avoid any labels of flood-like stimulus, and the

focus on 'off balance sheet' LGFVs in 2019, coupled with advanced quota

allocation of LGFV's for 2020 suggests this will likely continue, despite the

issues that belie the space. N.B. Targets not formally released until March.