Economist, Centennial Asia Advisors

Jason Tan

Economist

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

<ul><li>The Chinese economy is on weak footing – the government has acknowledged the new normal and has targeted a growth range of 6.5-7%, instead of a specific growth figure. Lowered economic growth seems to be the new and accepted reality in China, even though the government is likely to step in if growth looks to be falling below the 6.5% floor.</li><li>But financial buffers to backstop the economy remain robust, and the Chinese economy is unlikely to experience any crisis in the near-term. Fiscal policy will take the lead in shoring up economic fundamentals, while monetary policy will play a supporting role.</li><li>Political jostling is increasing in intensity in China, particularly as President Xi looks to consolidate political power upon himself. Premier Li looks to be sidelined, with Xi’s trusted aide Liu He taking over the mantle of economic policymaking. However, the danger is that with a monopoly on decision-making, Xi’s mental acuity will be stretched - a policy misstep is the most salient risk to the Chinese economy, especially given the faith among the Chinese people that the central government will backstop the economy.</li></ul>

The Chinese economy is on weak footing – the government has acknowledged the new normal and has targeted a growth range of 6.5-7%, instead of a specific growth figure. Lowered economic growth seems to be the new and accepted reality in China, even though the government is likely to step in if growth looks to be falling below the 6.5% floor.But financial buffers to backstop the economy remain robust, and the Chinese economy is unlikely to experience any crisis in the near-term. Fiscal policy will take the lead in shoring up economic fundamentals, while monetary policy will play a supporting role.Political jostling is increasing in intensity in China, particularly as President Xi looks to consolidate political power upon himself. Premier Li looks to be sidelined, with Xi’s trusted aide Liu He taking over the mantle of economic policymaking. However, the danger is that with a monopoly on decision-making, Xi’s mental acuity will be stretched - a policy misstep is the most salient risk to the Chinese economy, especially given the faith among the Chinese people that the central government will backstop the economy.

China: Central Government a Credible Economic Backstop, but Politics Is the Crux