Pantheon with the note. Is good news now bad in China?
China’s NPC is Likely to Bring Only Modest Policy Support
China’s surprisingly strong February PMI data are likely to lead the presumptive new premier, Li Qiang, to downplay the need for a major stimulus package during his National People’s Congress opening day speech on March 5. Instead, we expect him to announce a modest support package to boost consumption, business investment and the property market. An important indicator will be the official growth target: 6% would be ambitious, but we think that 5% or 5.5% is more likely, given the headwinds from declining exports and the sluggish property market.