In our view, it can be critical in 4Q23 as we believe many new policies on the economic front are likely to come out.
We wanted to pick up the more important ones to keep you informed.
Several recent news and events have revealed some hits on economic and political fronts:
1. The turning point for A-shares is approaching.
Recently, China Life Insurance and New China Life Insurance plan to jointly establish a 50 billion RMB private equity fund, focusing on investing in high-quality listed company stocks.
This action we believe aims to promote the domestic A-share market, which is an indirect way to boost the domestic economy.
2. The Party’s tone has shifted from politics to economics, technology, and innovation
Chinese President Xi Jinping paid a visit to Shanghai, visiting the Shanghai Futures Exchange, the Shanghai Science and Technology Innovation Achievements Exhibition, and the Minhang District New Era Urban Builders and Managers Home.
His visit reflects the Party's emphasis is shifting from politics to economy including financial markets and technological innovation.
3. Strengthen Derivative market
Xi’s visit to the Shanghai Futures Exchange may indicate China's intent to strengthen the regulation and internationalization of financial markets, particularly the derivatives market.
This move could enhance China's influence in global financial markets and strengthen the international discourse power of the 'Shanghai Price'.
4. Would there be a new economic direction in China’s next five years - Postponement of the Key Economic Plenum
Chinese President Xi Jinping is seen delaying a crucial Communist Party meeting, known as the third plenum, which is typically held every five years to outline China's long-term reform agenda.
This postponement defies norms and marks the first time in over three decades that the meeting might be delayed to an off-schedule year, potentially until 2024.
The third plenum usually focuses on economic issues. It has historically been a platform for major reforms, such as Deng Xiaoping's “opening up and reform” strategy in 1978 and Zhu Rongji's endorsement of a “socialist market economy” in 1993.
As such, next year’s two sessions will become the most important meeting for the direction of China’s next five years.
