Analysts indicated that although China’s 5% economic growth objective for 2024 is ambitious, it is doable provided more stimulus measures in monetary, fiscal, and regulatory policy are supported.

“More stimulus plans will have to be disclosed in order to meet the goals outlined,” Eastspring Investments’ chief asset manager, Bill Maldonado, stated at the Reuters Global Markets Forum, opens new tab.

Shuyan Feng, deputy general manager for investment management at Huatai Asset Management, noted that Premier Li Qiang’s first work report did not meet expectations on a number of fronts, including the nation’s budget deficit and plans to issue 1 trillion yuan ($139 billion) in special ultra-long term treasury bonds.

According to her, the report did not provide any encouraging signs for foreign investors.

Feng, whose company manages more than $100 billion in assets, expressed dissatisfaction over the lack of further steps on the anticipated real estate rescue package and expressed concerns about several areas of China’s fiscal assistance policies and the administration’s communication approach.

According to Capital.com senior markets analyst Kyle Rodda, President Xi Jinping’s longer-term vision for China is expected to be re-anchored in the narrative by the ongoing National People’s Congress (NPC).

But he said that the work report showed how little the administration’s strategy had changed.

“There was again no indication of a pivot to more short-term, counter-cyclical policy on the horizon … (which) should not be surprising. It’s a continuation of recent form.”

China’s short-term investment outlook is good because to cheap valuations and positive price movement, but Rodda cautioned that significant long-term risks such as regulatory uncertainty, systemic risk, and nation risk still exist.

Against this environment, Prudential Plc’s investment management division for Asia, Eastspring, is continuing to hold its contrarian, “positive” view on Chinese shares.

To weather the current scenario, investing in China needs a strategic strategy that focuses on policy-centric sectors like semiconductor technology, green efforts, and electric car supply chains, according to Eastspring CEO Maldonado.

“Sentiment is extremely poor… (but) in terms of the growth trajectory, things are probably better than many assume,” said Maldonaldo, whose firm managed $216 billion in assets as of September 2023.

(Adapted from Reuters.com)