China’s major political meetings in 2023 are more than halfway through. National Political Consultative Council meeting or CPPCC which began on Saturday, March 4, 2023, and then National People’s Congress or NPC which started on March 5, 2023, called 2 council meetings (2 sessions) are held side by side And it has been going on until it has begun to reveal quite a bit of the essence. Be it the 2023 GDP goal, setting goals for the government budget. and organizational restructuring in order to be more compatible with the self-reliant policy.
Set a 2023 GDP growth target of 5%, focusing mainly on growth in domestic consumption.
After China was hit by lockdowns and the real estate sector, in 2022 GDP grew by only 3%, which is below the target of 5.5% and is considered the lowest growth rate in more than half a century this year, Mr. Li Keqiang, Prime Minister. China’s Minister And representing the National People’s Congress (NPC) has announced the GDP target for 2023 with a target of growth of 5%, in line with the forecasts of many analysts. which currently reflects that The Chinese government expects the economy to recover quite well. After opening up the country in three years, the target for employment this year is set to increase 12 million jobs (in 2022 at 11 million jobs) and will control the unemployment rate to not be more than 5.5%, close to the 2022 average
Set a deficit of 3% more than 2022 in the hope of further stimulating the domestic economy.
Another important highlight is The national budget deficit is targeted at 3% of GDP, which is higher than last year’s 2.8% of GDP, with the deficit increasing this year. There is an increase in the quota for issuing ad hoc bonds. 150 billion yuan of special purpose bonds to 3.8 trillion yuan, about $551.12 billion. In the past, this amount was often distributed to local governments and used to invest in infrastructure that would help create jobs. It’s like another way to stimulate domestic consumption.
China sets a GDP growth target of 5% and a budget deficit of 3% of GDP.
There was also a 7.2% increase in the military budget compared to the previous year. The issue has been linked to China’s stance on Taiwan in the media. At the meeting, Li Keqiang emphasized that “Taiwan is part of China. ready to support peaceful reunification and will not use military force if not necessary,” which was a clear stance and the tension did not rise compared to the previous round of meetings. And when comparing the military budget in the last 5 years, it was found that it has increased all the time between 6% – 8%. Military tensions as far as many media are concerned
Military spending increased by 7.2% YoY, similar to the previous year’s increase.
The government structure has been restructured to be in line with the policy of greater self-reliance.
In addition to economic disclosures, Most recently, Tuesday, March 7, it was said that Xi Jinping has revealed a major restructuring plan by the government with the establishment of a new agency The National Data Bureau (National Data Bureau) to handle data specifically. and reform the financial system with the establishment of a state financial supervision committee Act to supervise financial group companies and protect consumers. this function was originally under him central bank of china (PBoC) and the China Securities Regulatory Commission (CSRC) to consolidate more power under the central government. and to solve problems in the financial system that have been around for a long time
There was also reform to the Ministry of Science. It seeks to combine education and research with practical applications. as well as establishing a national technology transfer system with the ultimate goal of making China’s technological development especially the industry A semiconductor of countries that are still chasing western nations Including reducing the number of central government personnel by more than 5%, who see that this announcement of the overhaul of the Chinese agency Shows China’s position to stand for self-reliance. and increase the ability to compete equally with western nations
2 council meetings of China has reached the end of the National Political Consultative Council meeting or CPPCC be completed on March 11, 2023 and National People’s Congress or NPC It ends on March 13, 2023, which will eventually make further progress. The announcement must be followed at the end of the meeting. But considering what has already been revealed It is considered important information that pretty much covers what investors can expect to get from this meeting. These issues have partially reflected on the stock market. Compared to past statistics Chinese stock market (CSI300 index) usually rises before and 2 weeks after the meeting. This year, the CSI300 index has gained +2.38% in the two weeks before the meeting. After this, we must continue to follow that. After this meeting, can the Chinese stock market be positive?
Source: Bloomberg, CNBC & UBS
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