China's 3rd National People's Congress: Leaders Pledge Reforms, But Expectations for Economic Stimulus Measures Are Undermined

Chinese leaders pledged full support for technological innovation, deepening scientific and technological reforms, improving the financial system, and advancing China's modernization at the Communist Party's 3rd National People's Congress, which came to an end on Thursday.

However, major policy changes were not announced, and expectations for economic recovery, which had been pending for many years, were disappointed.

According to the communiqué of the meeting chaired by President Xi Jinping, “We must make more use of the role of the market, cultivate a fairer and more dynamic market environment, and make resource allocation as efficient and productive as possible.” This meeting, which is chaired by President Xi Jinping, is held once every 5 years to determine the government's policy policies.

“We will remove restrictions on the market while striving to ensure effective regulation, better maintain market order, and correct market failures,” the statement added.

Leaders also pledged to enable private and public enterprises to have equal access to factors of production and compete on an equal footing.

China's leaders repeated their commitment to opening up to the outside world and aimed to deepen foreign trade reforms. “By 2035, we will finish building a high-level socialist market economy.

Investors were expecting a concrete stimulus to the economy. “ANZ Group analysts said, “The lack of major policy changes weighed on sentiment. “Investors were disappointed that no emphasis was placed on addressing structural issues in the economy, such as the struggling real estate sector.

The Shanghai Composite Index (SHCOMP) ended 0.2% higher on Friday and regained its decline amid signs that the “national team” was buying ETFs linked to mainland Chinese stocks. A national team is a national support organization that purchases stocks to ensure market stability.

However, the MSCI China Index closed at a 1.5% decline, ending a week of continuous decline during the day. In the commodity market, copper (HG1:COM) recorded its biggest weekly decline since 2022 amid uneasy demand in China.