China: slowing credit growth, and CCP anniversary
The country’s resolute management of the coronavirus has led to a dramatic economic recovery in the last year. Policymakers in Beijing have recently focused on curbing credit growth, which should be more in line with nominal economic growth. Credit growth has outpaced economic growth by an average of 4 percentage points over the past 15 years. The logical consequence of this is that economic growth will slow down. The latest five-year plan, presented in March, contains ambitious proposals to make China an innovation leader. The country also wants to reduce its dependence on foreign technologies and thus become more self-sufficient. This policy could well lead to new tensions with the United States. Rapid productivity growth is essential for China, especially given the country’s ageing population. It’s time to celebrate. After the ceremonies in 1981, 1991, 2001 and 2011, the Chinese Communist Party (CCP) will hold a general congress on 1 July to celebrate its 100th anniversary. In 2011, for example, Hu Jintao, the Party General Secretary at the time, gave a speech on the triumphs of the Party since 1921. In his speech, he reiterated the goal of making China a “moderately prosperous society” by 2021, and a “modern socialist country” by 2049 (the 100th anniversary of the People's Republic of China). Even more important than the centenary, the “turnover” of political leaders will begin in 2022 at the local level and will then culminate in the 20th National Party Congress.