Expert: Stabilizing expectations crucial for Chinese market

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Editor's note: The article is based on an interview with Andy Mok, a non-resident fellow at the Center for China and Globalization.

The annual Central Economic Work Conference was held in Beijing from December 19 to 21, setting the tone for next years' economic development. Chinese President Xi Jinping delivered a speech to analyze China's current economic situation and arranged economic work for 2019.

China has implemented a proactive fiscal policy and prudent monetary policy for eight consecutive years. Given the current global economic downturn, China will continue the combined economy policies and focus on making the capital market play a more significant role in the country's financial system.

In Xi's speech, stabilizing expectations has been regarded as a pivotal point in economic work in order to shore up confidence toward the market, promote people's happiness and maintain sustainable economic development.

Andy Mok, a non-resident fellow at the Center for China and Globalization, explains that stabilizing expectations is to keep equity markets on a stable level.

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Facing the chaotic international system, the Chinese government has created an island of stability so that more predictabilities and certainties are guaranteed, which provides benefits domestically and globally.

Andy points out that, in terms of articulating its policy purposes, the Chinese government has been remarkably consistent and methodical since the beginning of its reform and opening-up, which provides the business community all over the globe with confidence in China.

For example, the U.S., a country that used to be paramount economically, has now appeared to cause many uncertainties and divergence in terms of international relations and decisions related to its interest rates. But China is relatively more flexible in dealing with such divergence.

And from Andy's perspective, that flexibility is the way that Chinese policymakers communicate to the world and domestically if China has the intention to stabilize expectations.

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