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By Archie Zhang
     BEIJING (MNI) - China's leadership emphasized stability and growth during a
key economic meeting this week, suggesting policymakers will seek to ensure
growth will be at least 6% in 2020, according to a report from China Finance
Forum 40, a think tank whose members include government officials. 
     Here are a few points from analysis presented by CF40 on the communique
released at the conclusion of the annual Central Economic Work Conference. 
     - The growth target is likely to be "defending 6%": With stability as the
leading keyword, followed by "reasonable growth in quantity and steady
improvement in quality," this likely gave a clear answer to the debate as to
whether 6% growth target would remain.
     - Monetary policy was changed to "appropriate in terms of flexibility" from
"appropriate between loose and tight," and the meeting pointedly called for
"increasing medium-to-long-term capital raising for manufacturing." The message
is for lower costs of financing and looser credit. The BOC is likely to continue
lowering MLF policy rate and provide cheap medium- and long-term loans. It also
tries to prevent "credit flooding" by emphasizing social financing must
correspond to growth. 
     - Preventing risks and deleveraging were deemphasized compared with last
year. Instead, the communique calls merely on stabilizing leveraging, a more
proactive stance.
     - "Limited room for expansionary fiscal policy" is indicated in that the
phrase of "cutting taxes and fees at a larger scale" was replaced with that
fiscal policy shall ensure "increased quality (of growth)." 
     - The issuance of local govt bonds next year may be limited given that
"greatly increase (the) issuance of special-purpose local govt bonds" was
omitted. Policies will likely boost credit support for infrastructure through
expanding financial balance sheet. 
     - Another noteworthy point is that the communique didn't mention "not using
property as a short-term economic stimulus," a phrase repeated earlier in a
mid-year meeting of the Politburo.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 10 8532 5998; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
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