[Click eStock] "The Core of China's Two Sessions: Four Key Points Including Economic Growth Target"

"Likely to Propose 5% Similar to Last Year"

Daishin Securities identified four key points to watch at the China Two Sessions starting on the 4th: △economic growth target △fiscal deficit target △real estate stimulus measures △technological innovation.

Moon Nam-jung, Global Strategist, said, "If last year's Two Sessions solidified Xi Jinping's third term, this year 'economy' will be the biggest topic based on the challenging domestic economic conditions," adding, "This year is especially important as it marks the 75th anniversary of the founding of the People's Republic of China and a crucial year to achieve the goals of the 14th Five-Year Plan."

He emphasized, "First, attention should be paid to Premier Li Qiang's first work report at the opening ceremony of the 5th National People's Congress, where this year's economic growth target and major policy directions will be announced."

The first key point, the economic growth target, is expected to be aggressive. He said, "Local governments, facing increased fiscal pressure, have set conservative economic growth forecasts for this year, but the central government, aiming to double the economic scale by 2035 compared to 2020, is expected to set this year's GDP growth target aggressively around 5%, similar to last year."

He also noted, "Following the additional budget of 1 trillion yuan last October, the fiscal deficit target as a percentage of GDP for 2023 was raised from the previous 3% to 3.8%, indicating flexibility in fiscal stimulus. This year, the fiscal deficit target is expected to be set in the range of 3.5% to 3.8% of GDP, with emphasis on additional liquidity supply through reserve requirement ratio and Loan Prime Rate (LPR). The LPR is effectively the benchmark interest rate."

He continued, "Policies to stimulate demand for real estate market recovery and financial support for real estate companies, as well as the three major real estate projects discussed at the end of last December (guaranteed housing construction, Chengzhongcun redevelopment, and public infrastructure construction), will be emphasized."

Furthermore, he said, "With the technological hegemony competition with the U.S. and the global AI revolution becoming visible, technological innovation will also be highlighted at the Two Sessions," adding, "Policies to foster the three new growth engines for exports?new energy vehicles, lithium batteries, and solar batteries?will be emphasized."

He concluded, "If the 5% economic growth target is maintained this year and a strong commitment to domestic issues such as real estate stimulus is confirmed, conditions will be set for improved Chinese economic sentiment and continued stock market rebound," diagnosing, "The period after the Two Sessions will be crucial for market interpretation."

This content was produced with the assistance of AI translation services.