China’s leadership change spells good news for economy
China’s leadership handover next week looks likely to bring good economic news.
In his outgoing speech yesterday, Communist Party chief Hu Jintao said that the party had plans to double the average household income by 2020.
It is believed that the announcement is an indication that China will embark on another stimulus package after the handover. Party general secretary Xi Jinping will assume the top spot next week after the close of the 18th Communist Congress.
Hu also hinted that China might move to inflate its currency and allow it to move closer to “market rates”. The artificially low currency is seen to give China an unfair trading advantage and has sparked protests from many western nations.
The much feared Chinese economic slowdown also appears to be rebounding. According to an exclusive interview by Hong Kong daily, South China Morning Post, annual growth will exceed the 7.5%, currently predicted.
Bank of China deputy governor Yi Gang said that inflation would fall somewhere in the range of 2 to 3% despite the higher than expected growth. This would give the government room to manoeuvre and enact stimulus.