Flash: Xi tells local Chinese leaders to focus less on GDP growth - Nomura

Fxstreet.com (Barcelona) - Nomura Economist Zhiwei Zhang notes that Communist Party Chairman Xi delivered a speech to a party meeting on personnel and organization issues, in which he stressed that "we should no longer evaluate the performance of leaders simply by GDP growth.

Instead, he believes that the party should look at welfare improvement, social development and environmental indicators to evaluate leaders". Zhang believes that this is an important message to local government leaders who have strong incentives to push up investment under the existing "GDP growth oriented" performance evaluation framework. He writes, “It confirms the government is willing to tolerate slower growth to reduce risks and improve welfare, and we believe it reinforces our view that there is a 30% chance that China's growth may drop below 7% in Q3 or Q4.”