China | 2021 Outlook: Better settle in for a respite

Summary

Better settle in after a long haul. After experiencing over-deleveraging and economic slowdown in 2017, China-US trade war since 2018, 2019 African Swine Flu and this year’s most unprecedented coronavirus pandemic flare-up and the arduous work of containing it, Chinese economy might have a previous respite in 2021.

Key points

• Key points:
• 2021 marks the first year of China’s new 14th five-year plan that it sees as most essential to confront the “middle income trap” and to construct a "modest advanced economy".
• China’s first-in first-out of the Covid-19 pandemic and the ongoing V-shape snap-back, together with a comparatively less severe China-US relation and a “no sharp turnaround” policy stance will make the next year quite a good time window for a recuperation.
• However, the above analysis cannot gloss over the fact that Chinese economy is still fraught of elevated uncertainties.
• To deal with the elevated and inevitable uncertainties, China’s 2021 policy initiatives are summarized in the recently concluded Annual Central Economic Work Conference which was held on December 16-18th.

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