China signaled a likely reduction in the reserve requirement ratio for banks to enhance their ability to expand credit for the purpose of supporting economic recovery and stabilizing market confidence. PBoC Governor Yi Gang recently said that a RRR below 8% provides support for the real economy after 14 reductions in the past five years. 

Meanwhile, China's National People Congress (NPC) kicked off, with a conservative growth target for 2023 announced at 5% compared to the market's expectations of a 5-5.5% target range. Other economic targets were broadly similar to last year: fiscal deficit at 3% (2022: 2.8%), special local government bond quota at CNY3.8tn (2022: CNY3.65tn), jobs creation at 12mill (2022:>11mill) and CPI inflation at around 3% (2022:3%).