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Outlook 2020

China searches for balance

Striking a balance between reform and growth stability will be at the forefront of the minds of Chinese policymakers in 2020 as the country aims to continue its transformation into a globally competitive country backed by technology and innovation.

In the medium term, China aims to bolster its economy with high value-adding manufacturing and services sectors. Expect heavy investments in technologies such as 5G mobile networks, artificial intelligence, robotics and the internet of things as China looks to develop itself into a knowledge-based economy.

City-clustering initiatives will further boost urbanisation, in turn supporting metropolitan lifestyles, consumption habits, and innovation capacity.


Outlook 2020

The New Year is upon us. The year 2020 looms as a landmark one for the global economy as trade, technological and environmental factors drive change at a scale rarely seen.

At ANZ Institutional, we aim to help our customers put themselves in the best possible position to take advantage of these forces. Our subject-matter experts have the insight to offer market-leading thought leadership in a range of complex areas from across more than 30 global markets.

We asked our experts about the key factors they see shaping markets and industry in 2020 – and the opportunities and challenges within. We’ll be sharing the responses with you over the coming weeks.


This transformation will not be without challenges. In the near-term, deflationary (as opposed to inflationary) risks are a big concern.

The People’s Bank of China, the country’s central bank, will likely maintain an easing bias and continue to use multiple policy tools (including required reserve ratio cuts) and targeted measures to support the economy.

The trade dispute between China and the US increases the uncertainty of a financial decoupling between the two nations in the long run. Whether this will present risks or opportunities to China is an open question.



ANZ Research expects expect China’s gross domestic product growth to slow to 5.8 per cent in 2020. The country is expected to announce an ‘official GDP forecast’ at ‘about 6.0 per cent’.

The adjustment is modest – a reduction of just a 0.2 percentage points from ANZ Research’s last forecast – but such a drop does represent the next phase in China’s structural slowdown.

Final-quarter 2019 figures are expected to show China’s economy expanded by 1.4 per cent, quarter on quarter, or 6.2 per cent year on year.


In the longer-term, China’s diminishing demographic dividend presents a structural challenge. The country’s demographic profile is currently akin to Japan’s in 2000.

ANZ’s demographic projection matches the timeline specified in Chinese President Xi Jinping’s ‘New Era’. By 2035, China’s share of working age population will shrink below the global average.

To sustain its current growth trajectory China therefore needs to be an innovation-driven country – and before it is too late.

Betty Wang is Senior China Economist at ANZ Institutional

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