2022 09 29 Great hall of the people

Transcript

More than two thousand senior CCP party members will gather in Beijing for several days starting October 16, 2022, for the 20th National Party Congress for a historical multi-day meeting.

What we know is that President Xi will be endorsed by the CCP members for at least a third five-year term and possibly, implicitly, a fourth five-year term.

Several senior CCP members will retire, including Premier Li Keqiang.

Premier Li, in recent months, has been the champion and the mouthpiece promoting stimulative financial policies and more relaxed regulations, particularly in regards to the property market. The conservative camp of the government, led by President Xi, has been silent. The most important signal that we wait to see from this Party Congress is whether the financial policies will be loose or tight.

Our guess is the former.

Policies will be increasingly supportive in order to alleviate the problem with liquidity in the property sector. Some individual property companies that have over-stretched themselves will likely be allowed to go into bankruptcy and not bailed out, but the entire sector will likely not be allowed to implode.

The Xi Administration also faces provocative pronouncements from the Biden Administration and the US Congress, regarding the US’ position on Taiwan. It will also be important to see if the Party Congress produces a different military and political stance.

Bottom line. Is Beijing an economic, political, and military hawk or a dove? Will they turn more hawkish or dial down on the rhetoric in an attempt to preserve economic prosperity and peace with the US? These are essential questions on which the market might get more clarity at the Party Congress.

Subscribe to our insights

If you are interested in our content, please sign up below and we will deliver Eurizon SLJ insights right to your inbox.



    I consent to my data being collected and stored for the purposes of providing me information regarding my enquiry and related services. If you have any questions about your data please contact us at research@eurizonslj.com

    Envelopes on a wood background
    Disclosure

    None of the contents of this document should be understood as constituting research on investment matters, or as a recommendations, advice or suggestions, implicit or explicit, with respect to an investment strategy involving the financial instruments discussed, or the issuers of the financial instruments, nor as a solicitation or offer, nor as consulting on investment matters, of a legal, fiscal, or other nature. All the companies of the Intesa Sanpaolo Group, its administrators, representatives, or employees, decline any responsibility (fault-based or otherwise) deriving from indirect damages potentially caused by the use of this communication or its contents, or in any case deriving in relation to this document, nor may they be consequently held liable for any of the above. The information provided and the opinions contained in this document are based on sources considered reliable and in good faith. However no declaration or guarantee is offered by Eurizon SLJ Capital Limited, explicitly or implicitly, on the accuracy, exhaustiveness and correctness of the information, and there is no guarantee that results, or any other future events, will be compatible with the opinions, forecasts, or estimates contained herein.

    Views accurate as at the time of publication. Opinions expressed by the authors are their own and do not necessarily reflect those of Eurizon SLJ Capital Limited, Eurizon Capital SGR or the Intesa Sanpaolo Group.
    The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

    ESLJ-290922-I1