Big twice-in-a-decade meeting in China may have a curious market impact

Two ways China's National Congress meeting could impact global markets

The upcoming National Congress of the Communist Party of China is expected to begin next week, and decisions made at the massive meeting of Chinese government leaders have the capacity to negatively affect global commodity and equity markets.

Any economic policy that comes about following the meeting will be watched closely and could impact global economic growth, said Miller Tabak equity strategist Matt Maley.

"The Chinese government has tried to pull back a little bit on the credit creation within China in the last year, but they've eased off on that, allowing some of that credit to grow again as they've been going into this Congress. The problem is if they start to tighten up on it again after Congress is done, after they've consolidated their power, we worry that will have an impact on global growth," he said Wednesday on CNBC's "Trading Nation."

The country's buildup of credit has been an issue in recent years, and last month led S&P Global Ratings to cut China's credit rating. Decisions related to changes in government leadership and national policy are expected out of the meeting, and President Xi Jinping is expected to retain his current post.

If the People's Bank of China and the Chinese government pull back on their stimulus plans after the congress and become a bit more hawkish, it could impact global commodity prices, Maley wrote in an email Wednesday to CNBC.

"The industrial commodities are already beginning to roll over, so if they do indeed pull-back on their stimulative efforts, it could have an impact on the 'reflation' trade everybody is talking about right now," he added. China is a significant producer and consumer of some industrial metals such as copper and iron ore.

On another front, any fallout after the congress related to the relationship between China and North Korea could rattle equity markets, Maley said.

"Once they get through that congress next week, we worry that you'll start to see this situation with North Korea start to escalate once again," Maley said on "Trading Nation." He added that essentially the "only thing" that's negatively affected the U.S. stock market this year has been threats from North Korea.