^{MIZUHO SECURITIES ASIA LTD.  |  ECONOMICS RESEARCH}

Summary

Delivered at the opening ceremony of the National People’s Congress, Premier Li’s government work report outlined China’s economic policy for the year ahead. From the list of official targets, we note that the government’s priority is on maintaining steady growth while controlling financial risks, which calls for monetary tightening and fiscal expansion, as expected. Surprises in the report include the decision to keep the fiscal deficit unchanged at 3% of GDP, and the need to maintain the RMB’s position in the global monetary system. However, we feel that the underlying message will not change the stance on expansionary fiscal policy and a stable currency.

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