At the recent “Two Sessions” - as China's annual legislative meetings of their National Committee of the Chinese People's Political Consultative Conference (CPPCC) and the National People's Congress (NPC) - Chinese leaders pledged to deepen economic reforms and strive for appropriate economic growth driven by domestic consumption, rather than investment. They have also placed importance on upgrading technologies and adding value to their manufacturing sector.
Given this, KResearch is of the view that China's economic policies may achieve stable growth in 2014, while driving though reforms to gain a more balanced economic model that will be led by domestic consumption. It is expected that China will be able to maintain economic growth of perhaps 7.4 percent in 2014, down from the 7.7 percent achieved in 2013. If so, that would be their lowest GDP growth rate in 24 years.
Nevertheless, factors that must be monitored closely in 2014 would include China's controls on its shadow banking sector that has begun to experience defaults, plus other financial reforms on interest and forex rates, as well as capital accounts that will allow the financial market to grow at a faster pace than during 2013.