Moody's with some comments on China's conflicting policy objectives:

China's policy makers appear to have set themselves three main policy objectives:

  1. maintaining reasonably high rates of GDP growth,
  2. reforming and rebalancing the economy,
  3. and ensuring financial and economic -- and thereby social -- stability.

The Government Work Report delivered to the National People's Congress on 5 March made explicit reference to each of these policy objectives.

  • "However, against the backdrop of China's slower economic growth, capital outflows and rising corporate stress, it will be increasingly difficult for these policy objectives to be achieved in unison," says Michael Taylor, a Moody's Managing Director and Chief Credit Officer for Asia Pacific.
  • "With the government having now given a strong commitment to a growth target of between 6.5%-7.0%, it seems unavoidable that one of the other policy objectives will assume lesser priority. The most likely near-term casualty is reform momentum."

Comments from Moody's report "China Credit: Conflicts Between Policy Objectives Raise Risk That Momentum on Reform Will Slow"

(Bolding above is mine)

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In the short-term, the diminishing of the focus on reform will be a positive for markets, but over time reforms will need to be implemented.