Incoming premier Li Keqiang, who will succeed Wen Jiabao in March, will be present at the CEWC and is widely viewed as a proponent for bolder reforms. The closely watched meeting’s focus will be on macroeconomic policy, tax reform, income distribution, and urbanization. Output from the session is expected to include plans for further monetary easing, with lowered rates to cut corporate financing costs and gradually lower reserve requirements for banks.
As China’s economic data seems to be turning a corner, one play could be avoidance of US Chinese ETFs, whose movement has been divergent from the Chinese stock market, and instead make a long play in commodities. Forecasted to slow, Chinese copper consumption could maintain 4.8% growth or improve, creating opportunities in copper futures and related equity options.
John Voorheis
KOTM Contributor
jlvoorheis2@gmail.com