China's "Prudent Monetary Policy" Eyes 5% Growth

“China set a growth target of ‘around 5%’ for 2023, according to Premier Li Keqiang’s government work report released Sunday,” a CNBC report said. “Analysts generally expected China to set a GDP target of above 5% for 2023. The average forecast for growth is 5.24%, according to CNBC analysis.”

In the case of China, it’s a particularly challenging feat, especially given the economic challenges the country has endured within the past few years. First, it was the COVID-19 pandemic that hampered the economy, then the second-largest economy dealt with challenges in its real estate market and a slumping tech sector.

Now that China’s economy is gaining traction once again, the country is also having to deal with inflation just like the rest of the world. Given this, China’s central bank needs to adjust monetary policy carefully to not only keep inflation in check, but to also maintain economic recovery.

“The PBOC will provide ‘forceful’ financial support for the stable and healthy development of the economy,” People’s Bank of China Governor Yi Gang told a news conference, per a Reuters report.

Traders looking to seize the opportunity and profit from China’s recovery can consider the Direxion Daily FTSE China Bull 3X ETF (YINN A+). YINN specifically tracks the FTSE China 50 Index, which consists of the 50 largest and most liquid public Chinese companies currently trading on the Hong Kong Stock Exchange.

Right now, the fund could be offering an area of value, as it’s currently trading below the 50- and 200-day moving averages. The relative strength index (RSI) is in between the oversold and overbought levels, so this could cause traders to pause and wait for further confirmation.

Of course, if the trade goes the opposite direction, there’s the Daily FTSE China Bear 3X Shares (YANG A-). It allows traders to play the other side if bearishness takes over.

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