Steady as China goes

The policy messages in the statement released after this weekend's Central Economic Work Conference were broadly in line with recent other statements, including the one after the Dec 4 meeting of the Party's ruling authority, reflecting some satisfaction on growth and emphasizing stability.

The statement implied no material adjustment to the macro policy stance. It also did not suggest a rapid change on the reform front. It reconfirmed key principles without going into many details, suggesting that the work on "comprehensive reform design" and "top down design" reform strategy is still work in progress.

On the macroeconomic front, the statement's content and tone imply the government would like to continue to support economic growth against a backdrop that is described as challenging. At the same time, describing China's economic growth as steady, the statement shied away from major stimulus and called for attention to financial risks. The official prescriptions remain for fiscal policy to be "proactive" and monetary policy to be "prudent". These labels should not necessarily be taken literally but the fact that they remain unchanged is consistent with a stability-oriented approach.