China is delaying a closely watched economic policy meeting that was due to start this week, after Covid infections surged in Beijing, according to people familiar with the matter.
There’s no set timetable for when the Central Economic Work Conference, usually attended by President Xi Jinping, will be rescheduled, the people said, asking not to be named discussing confidential information.
The conference, where officials discuss policy objectives for the coming year, was due to begin on Thursday. Besides Xi, the meeting is attended by members of the Politburo, provincial governors, and heads of government agencies and financial institutions. In the past, the meeting would last three days, with a readout published in state media at the end.
“Public health considerations are probably the main factor behind the delay, given that Beijing is experiencing a huge wave of infections,” said Gabriel Wildau, managing director at advisory firm Teneo Holdings LLC in New York. “It doesn’t make much sense to hold a meeting that would likely turn into a super-spreader event for China’s top leaders.”
China this month called an abrupt end to its strict pursuit of Covid Zero, scrapping most testing and isolation of infected patients. Signs are now emerging that the virus is spreading rapidly, including in Beijing — where there are long lines at hospitals and a growing shortage of medication to treat fevers. Beijing’s fever clinics reported 22,000 visits on Sunday, 16 times greater than the previous week, state broadcaster CCTV reported Monday, citing Li Ang, a spokesperson from the municipal health commission.
The State Council Information Office didn’t immediately respond to a fax seeking comment.
With the unexpected about-face injecting more uncertainty into an already fragile growth outlook, economists had been expecting officials to signal looser fiscal and monetary policy and more easing in the property market to bolster growth.
A target for next year’s economic growth would also usually be discussed at the conference. Targets get officially disclosed at the annual meeting of the national legislature in March.
“I expect a major policy focus on reviving growth in 2023, including support for housing and consumption, but stimulus policies won’t have much impact if everyone is sick,” Teneo’s Wildau said. “It’s possible that policymakers may delay some measures until after the current wave of infections has begun to recede.”
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 conference by making a decisive shift toward propping up growth. Bloomberg News reported last week that senior officials have been debating a growth target of about 5% for next year.
The CEWC is usually held shortly following a Politburo gathering.
The economy is expected to grow just 3.2% this year, the slowest pace since the 1970s barring the pandemic slump in 2020, according to economists surveyed by Bloomberg.
Authorities have taken a number of decisive steps over the past weeks to prop up growth, including rolling out forceful measures to backstop the slumping property market. Those came after a sustained campaign over the past years that included a broad crackdown on private enterprise that roiled markets.
--With assistance from Jacob Gu.
©2022 Bloomberg L.P.
