China NPC - Looking for direction in a listless market

While many await job data from the US this week, I am instead watching the Chinese NPC that is happening over the next 3 days.

With the rest of the world economies in doldrum, how China steers its economy over the next few months will be crucial and will likely have the most direct impact on the market.

Things to look out for:
a) China Monetary stance - we know that china is tightening and the NPC will tell us that. Hopefully the NPC will set the tone of how much tightening will take place.

b) China economy recovery - China economy has remained robust although the recent manufacturing number has slowed down. The NPC will state the government view on the risk and direction of the economy going forward.

c) Yuan - China is being pressured to re-value the RMB. The question is when and how much. NPC is likely to reiterate the Chinese hesitation to re-value the RMB due to the risk on its export sector. If the revaluation of the yuan is limited, then the chinese is back to using monetary policies to address any inflation issue - this will have an impact on chinese banks and property stocks.

Most importantly, China is an important engine for the world economy with US and Europe still struggling to get their footing. Hence I suspect, if there is any good news, the market is going to look out for what is happening in China again.



How and what will China do? -- focus of world's media
by Xinhua writers Dai A''di, Ma Mengli

"How and what will China do?" at its upcoming parliamentary plenary sessions has recently become a focus of world media.

As the annual plenary sessions of China''s National People''s Congress (NPC) and the National Committee of the Chinese People''s Political Consultative Conference (CPPCC) are set to start on March 5 and March 3 respectively, the international community has started to turn its attention to China.

The two meetings will discuss and analyze such topics and issues as China''s role in the global financial crisis, government measures to benefit the people and redivide social wealth, a drafted voting law that allows both urban and rural residents to enjoy equal rights to vote, and the building of China''s democratic politics, among others.

All of the topics and issues, which are of rich, in-depth and far-reaching significance, show that China''s development and progress have caused wide discussion in the world media.

TRANSFORMATION OF CHINA''S ECONOMIC DEVELOPMENT

Last year was the most difficult for China''s economic development since the new century started. But the Chinese people of all nationalities, under the leadership of the Central Committee of the Communist Party of China (CPC), worked hard to manage the country''s economy. That effort led to the achievement of an overall recovering trend while China was still facing the impact of the world financial crisis.

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