Taking stock: all eyes on China’s ‘two sessions’ for catalysts to drive AI-fuelled rally
The meetings will focus on economic growth and fiscal spending, with hopes for policies to support consumption and a weak property market
Investors are eagerly awaiting clues from China’s annual political meetings next week to see whether the artificial intelligence (AI)-driven market rally will strengthen, betting on further policy support to address issues ranging from flagging consumption and a weak property market to the increased tariff risk from the US.
More than 3,000 delegates from around the nation will gather for the National People’s Congress (NPC) in Beijing on Wednesday to discuss the government work report, which typically sets targets for economic growth, fiscal spending and inflation, as well as other development goals.
The NPC meeting comes at a time when Chinese stocks have regained favour with global investors that are seeking to reallocate assets amid turbulence in US markets. Trump’s tariff threat took some wind out of the run-up, sending the Hang Seng Index down by more than 3 per cent on Friday.
The parliamentary gathering will largely follow the supportive tone set in late 2024 by top officials who pledged looser monetary and more proactive fiscal policies this year.
The fiscal deficit ratio, a focal point on how to leverage government support to boost growth, is expected to increase to 4 per cent of gross domestic product (GDP) this year from 3 per cent previously, while the GDP target may be left unchanged at about 5 per cent, according to Goldman Sachs and UBS Group.