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China's Politburo: Development process of latest 'five-year plan' is "extremely unusual"

Development process during the 14th ‘five-year plan’ period is “extremely unusual and extraordinary”China’s economic strength and comprehensive national strength has jumped to a whole new levelTo make greater efforts to protect and improve people’s livelihoodTo continue to expand domestic demand, optimise supply conditionsWill implement more active and promising macro policiesAnd also enhance forward-looking and targeted coordination of policiesTo adhere to the tone of seeking progress while maintaining stabilityAnd also coordinate the overall situation domestically and abroadTo focus on stabilising employment, enterprises, markets, and expectationsNecessary to continue to implement a more active fiscal policy, moderately loose monetary policyTo strengthen the coordination between reform measures and macro policiesTo strengthen construction of the government itself, firmly establish and practice the correct view of political performanceThe headlines in bold are what I would deem as notable but the overall message is one that we’ve seen repeated for quite a while now. The biggest challenge for China since the property market crash has been trying to revive domestic demand conditions. And until today, that remains one of the government’s biggest hurdles in trying to get the local economy to prosper again.The outline of needing to pursue more proactive fiscal policy and “moderately loose” monetary policy reaffirms the overall dual policy direction that Beijing has been sticking to in recent years. So, there’s no changes there as we look to 2026.Besides that, China is also making it clear that they also focused on market developments – especially when it comes to the yuan currency and the dollar. We’ve already seen a glimpse of that earlier in the day here but they might have to do more if the greenback continues to weaken this year.As a reminder, a weaker Chinese yuan was China’s first line of buffer against Trump and his tariffs. As such, an even weaker dollar pretty much neutralises the playing field. A struggling dollar in that respect maximises the pain from tariffs and hurts competition from other countries more.
This article was written by Justin Low at investinglive.com.

đź”— Source

đź’ˇ DMK Insight

China’s economic strategies during the 14th ‘five-year plan’ are raising eyebrows, and here’s why that matters for traders: the focus on expanding domestic demand and optimizing supply conditions could signal a shift in global trade dynamics. As China aims to bolster its economic strength, traders should keep an eye on commodities and currencies that are sensitive to Chinese demand, like copper and the Australian dollar. If China successfully implements these macro policies, we might see a ripple effect across global markets, particularly in sectors reliant on Chinese consumption. Watch for any announcements regarding fiscal stimulus or trade agreements that could impact these assets. However, it’s worth questioning whether these ambitious plans can be executed effectively given the current geopolitical tensions and supply chain challenges. If the market perceives these policies as overly optimistic, we could see volatility in related assets. Keep an eye on key economic indicators from China, especially during the next quarterly reports, as they could provide insight into the effectiveness of these strategies.

đź“® Takeaway

Monitor China’s economic indicators closely; any signs of effective policy implementation could boost commodities and the AUD, while failure may lead to volatility.

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