Monthly insights and updates from the Invesco Fixed Income team.
China’s macro policies have entered a new phase, following the National People’s Congress (NPC) meeting in March. Compared to the past few years, we think China’s macro policies will feature tighter regulation, looser liquidity, and fiscal consolidation. Although official policy began to shift in mid-2017, the NPC meeting provided a formal endorsement of the new policy set. As previously communicated by President Xi and key economic advisor Vice Premier Liu He, China is (1) changing its focus from “quantity” to “quality”of economic growth, (2) seeking to reduce leverage and financing costs and strengthen the manufacturing sector and (3) seeking to reduce major economic risks, especially risks related to the financial sector and local government indebtedness.