China’s abrupt ending of its "zero-COVID" policy injects more uncertainty into an already fragile economy, raising the prospect of looser fiscal and monetary policy and more easing in the property market to bolster growth.
That’s the view from economists, who expect President Xi Jinping and his officials to flesh out policy objectives for the coming year at the Central Economic Work Conference taking place this week. A target for next year’s growth will also likely be discussed, although it won’t be disclosed until March, during the annual legislative meeting.
The Communist Party’s new Politburo, stacked with Xi’s allies after he secured a third term in power in October, last week set the tone of the economic conference by making a decisive shift toward propping up growth. Officials must now try to reverse some of the damage done to the economy from three years of stringent COVID-19 controls and the worst downturn in the property market in modern history, which have battered consumer and business confidence.