China central economic work conference signals more easing ahead

China conducted the central economic work conference (CEWC) in Beijing during December 18-21. This annual conference is the country's most important year end meeting as it prepares the mode of macro policy and the following year's reforms.

The country's macro policies are likely to continue to be accomodative to prevent the downside risks to China's growth and a potential systematic financial crisis.

The Chinese government seems committed to deepening the structural reforms, specifically the 'supply side reforms' with main priorities like unwinding capacity, destocking, deleveraging, lowering operation costs and increase of effective supply.

"As per our base case scenario, we expect the government to continue to roll out more easing measures on both the monetary and fiscal fronts given the weakening outlook and headwinds to growth", says Barclays in a research note.