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Chinese President Xi Jinping. Photo: Antoine Gyori/Corbis via Getty Images

China's growth so far this year has been better than expected and it will begin a shift away from stimulus and towards reform and restructuring, according to China's 25-member ruling body headed by President Xi Jinping. The news was reported by state news agency Xinhua.

Why it matters: China's stimulus has been a major source of relief for Chinese and global financial markets, and the government now looks to be shifting gears.

Background: China ratcheted up stimulus in 2018, including tax and fee cuts amounting to nearly $300 billion, and 5 separate cuts to banks' reserve requirement ratios to spur lending.

  • Economists, including IMF Managing Director Christine Lagarde, as well as buy- and sell-side analysts had largely credited this stimulus with righting China's economy. (And as a potential savior for Europe's wilting growth.)

What it means: The statement from the politburo came days after China reported better-than-expected 6.4% annual growth in Q1, defying expectations of a slowing economy.

  • The meeting statement removed the so-called six stabilizations from policy objectives: employment, finance, trade, foreign investment, investment and expectations.
  • Analysts at Goldman Sachs said in a research note that the politburo's findings signaled a "less dovish policy stance."

Yes, but: Morgan Stanley analysts point out that while acknowledging growth improvement in Q1, "policymakers remain cautious in light of still rising external pressures and downward pressures on growth."

The bottom line:

  • "The stimulus will be weak and the reform will be strong," Liang Zhonghua, chief macro analyst at the Research Institute of Zhongtai Securities, told the South China Morning Post. Liang said senior leaders sent a signal that economic growth was no longer policymakers' top goal.

Go deeper

Federal judge orders Trump administration to restore DACA

DACA recipients and their supporters rally outside the U.S. Supreme Court on June 18. Photo: Drew Angerer via Getty

A federal judge on Friday ordered the Trump administration to fully restore the Deferred Action for Childhood Arrivals program, giving undocumented immigrants who arrived in the U.S. as children a chance to petition for protection from deportation.

Why it matters: DACA was implemented under former President Obama, but President Trump has sought to undo the program since taking office. Friday’s ruling will require Department of Homeland Security officers to begin accepting applications starting Monday and guarantee that work permits are valid for two years.

Updated 52 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Politics: Fauci says he accepted Biden's offer to be chief medical adviser "on the spot" — The recovery needs rocket fuel.
  2. Health: CDC: It's time for "universal face mask use" — Death rates rising across the country — Study: Increased testing can reduce transmission.
  3. Economy: U.S. economy adds 245,000 jobs in November as recovery slows — America's hidden depression: K-shaped recovery threatens Biden administration.
  4. Cities: Bay Area counties to enact stay-at-home order ahead of state mandate
  5. Vaccine: What vaccine trials still need to do.
  6. World: UN warns "2021 is literally going to be catastrophic"
  7. 🎧 Podcast: Former FDA chief Rob Califf on the vaccine approval process.
2 hours ago - Health

Bay Area counties to enact stay-at-home order ahead of state mandate

Golden Gate Park. Photo: Justin Sullivan via Getty

Counties around the San Francisco Bay Area will adopt California’s new regional stay-at-home order amid surges in cases and ICU hospitalizations, health officials said Friday.

The big picture: California Gov. Gavin Newsom announced a three-week stay-at-home order on Thursday that would go into effect in regions with less than 15% ICU capacity. Despite the Bay Area’s current 25.3% ICU capacity, health officials from Alameda, Contra Costa, Marin, Santa Clara, San Francisco and the city of Berkeley are moving ahead with a shelter-in-place mandate in the hopes of reducing risk.