Economic Outlook - The "14th Five-Year Plan" is a continuation under the framework of the 2035 vision, aiming for "basic realization of socialist modernization" by 2035[3] - Despite increasing external risks, the central government's confidence in achieving economic goals remains strong, emphasizing the importance of productivity and innovation[3][8] - The upcoming "Proposal" is expected to reveal more detailed industrial support policies, indicating a clear direction for the next five years[3][7] Supply-Side Focus - Upgrading industrial construction is prioritized, with a growing emphasis on technological innovation, moving from a secondary to a primary focus in the planning[8][17] - The goal of significantly improving the level of technological self-reliance has been highlighted, reflecting the central government's commitment to innovation-driven development[8][17] Demand-Side Strategy - Domestic consumption is set to play a more prominent role, with expectations that consumption will contribute approximately 63% to economic growth during the "14th Five-Year Plan" period[19] - The importance of improving people's livelihoods and promoting inclusive growth has been elevated, with policies aimed at enhancing social security and housing policies[8][19] Risk Considerations - There are risks associated with the implementation of policies due to external environmental factors, which may affect the pace of policy execution[7][23] - More details on the "15th Five-Year Plan" are anticipated, with the full planning outline expected to be completed by the end of the year[23]

Summary of Key Points from Conference Call Records Industry or Company Involved - The discussion primarily revolves around China's economic policies, particularly the "Fifteen Five" (十五五) planning period and its implications for various sectors including technology, defense, and consumption. Core Points and Arguments 1. **Shift to Domestic Circulation** The focus of Chinese policy is shifting towards domestic circulation in response to complex international environments, reducing the relative importance of external circulation while enhancing national defense capabilities aimed at the centenary of the military [1][4]. 2. **Economic Growth Projections** The "Fifteen Five" plan sets a target for average GDP growth of 4.73% over the next five years, with an immediate goal of achieving 5% growth in the coming year [3][10]. 3. **Demand-Side Policies** The government is expected to implement demand-side policies through increased fiscal spending and bond issuance to support economic growth, particularly in response to any signs of weakening domestic demand [3][7]. 4. **Technological Innovation as a Key Opportunity** The plan emphasizes technological iteration as a significant opportunity, aiming for comprehensive upgrades in infrastructure and productivity, particularly in energy systems and AI [5][6]. 5. **Balanced Interaction Between Supply and Demand** The interaction between supply-side and demand-side policies is expected to be positive, with both sides working together to drive economic development [7]. 6. **Focus on National Defense and International Influence** The economic strength indicators have expanded from three to five, adding national defense and international influence, reflecting a greater emphasis on defense construction and enhancing China's international standing [13]. 7. **Investment Directions** Key investment areas identified include technology innovation, advanced manufacturing, domestic consumption, green transformation, and military modernization [25][26]. 8. **Market Sentiment and Stock Predictions** The Hong Kong stock market is currently in a transitional phase, with balanced risks in the short term but an optimistic medium-term outlook supported by stable fundamentals and liquidity [2][31]. Other Important but Possibly Overlooked Content 1. **Challenges in Economic Policy** The upcoming economic policies face challenges in achieving the "保 5" (ensure 5% growth) target while preparing for the "Fifteen" planning period [20]. 2. **Consumer Trends** New consumer trends are emerging, with a focus on "new demand leading to new supply," indicating a shift towards innovative consumer products and high-end manufacturing expanding market share overseas [29]. 3. **Real Estate and Population Issues** The plan mentions promoting high-quality development in real estate, though specifics are yet to be clarified. There is also a growing focus on addressing population aging and optimizing population structure [17][18]. 4. **National Security Strategies** The national security section emphasizes enhancing strategic capabilities to defend sovereignty and security interests, aligning with the current geopolitical context [19]. 5. **Investment Strategy Recommendations** Recommendations for investment strategies include diversifying portfolios to balance risks and returns, with a focus on sectors like technology and consumer goods, while being cautious in the bond market [27][30].

Economic Growth Targets - The nominal GDP growth target during the 14th Five-Year Plan period is set at no less than 5.5% to ensure the achievement of the 2035 vision goal[1] - To reach the 2035 goal of per capita GDP at the level of a moderately developed country, nominal GDP growth must average at least 5.4% over the next decade[1] - The average nominal GDP growth over the past eight quarters was only 4.2%, indicating a gap from the medium- to long-term target[1] Inflation and Economic Growth - The key to recovering nominal GDP growth lies in the price level; if the GDP deflator returns to the average level of 1.7% from 2012 to 2025, nominal GDP growth could reach 6.1%[1] - The GDP deflator averaged -0.9% over the past eight quarters, with a significant negative growth in service prices, necessitating a boost in consumer demand to recover service prices[1][2] Long-term Economic Strategy - The long-term economic growth strategy consists of three levels: the highest is the "three-step" strategy, the middle is the doubling target, and the lowest is the annual growth target[1] - Achieving the doubling target requires an average annual growth rate of 4.4% from 2020 to 2035, with a projected average growth rate of 5.4% for 2021-2025[1] Risks and Considerations - Risks to achieving the 2035 goals include potential long-term appreciation of the RMB against the USD, which could enhance the dollar-denominated per capita GDP[2] - Changes in real estate, consumption, exports, and population dynamics could significantly impact future economic growth and price levels[2]