China’s 2022 government work report offered conflicting signals: modest macro policy support, but an aggressive GDP growth target at “around 5.5%.” A pro-growth policy stance is clear, but it is not yet evident that policy will actually be successful in stimulating growth this year, to anywhere near targeted levels. The property sector still represents a meaningful drag and planned relaxations of COVID controls appear limited. It remains unclear which sector or combination of sectors within China’s economy can deliver a significant acceleration of growth in 2022. But headline output data will probably not reveal the real picture, which creates significant opportunities for those willing to closely monitor the gap between Beijing’s preferred narrative and economic reality.
