CBN丨Policy supports to shore up foreign investors' confidence

摘要：Overseas financial institutions have expressed enthusiasm for the Chinese government's upcoming policies to expand domestic demand

Hi everyone. I’m Stephanie LI.

Coming up on today’s program

Foreign institutions look forward to China's supportive policies to shore up economy and consumption this year;South Korean investors' China stock trades reach 2.5-year high.

China’s Annual Two Sessions 2025

Overseas financial institutions have expressed enthusiasm for the Chinese government's upcoming policies to expand domestic demand, promote consumption, and stabilize the real estate market.

Consumption and real estate were the two keywords during this year's Two Sessions. For consumption, the Government Work Report submitted by Premier Li Qiang during the Two Sessions proposed vigorously boosting consumption, improving investment efficiency, and expanding domestic demand. While for real estate, the report mentioned "stabilizing the property market" for the first time.

China will expand its trade-in subsidies to 300 billion yuan this year from 150 billion yuan last year, which is in line with UBS expectations, said Wang Tao, head of Asian economic research at the Swiss banking giant.

UBS has also paid attention to the Chinese government calling for supply-side policies to support consumption, such as easing market access and reducing restrictions, Wang said.

The key to stabilizing the property market will be designing and implementing effective real estate supporting policies, she added.

The Government Work Report mentioned the acquisition of unsold properties, pledging to give more autonomy to municipal governments in terms of purchase, prices, and use, which is expected to improve the efficiency of such policy compared with last year, according to KPMG.

In a rare move, the Government Work Report sets a consumer price index growth target of around 2 percent, marking the first inflation target below 3 percent in two decades.

"We are encouraged by the new 2 percent target on consumer inflation," said Xiong Yi, chief China economist at Deutsche Bank. "We think this means the government has moved away from the previous approach of setting an inflation ceiling toward a formal 2 percent inflation target, which demonstrates its commitment to preventing deflation."

Meng Lei, China equity strategist at UBS Securities, said investor confidence in the capital market is also recovering, driven by a comprehensive set of policy stimulus, a recovery in corporate earnings and the impact of artificial intelligence advancements such as DeepSeek.

He estimated the earnings growth of CSI 300 Index components to reach around 6 percent this year, which will further attract global investors' attention.

Greater Bay Area, Greater future

Deliveroo will end its operations in Hong Kong on April 7 and sell some assets to rival Foodpanda, the UK online food delivery giant said. Meituan-backed Keeta holds the largest market share in the city, followed by Foodpanda.Hong Kong Exchanges and Clearing has added the Stock Exchange of Thailand as a recognized stock exchange, allowing companies primarily listed on SET’s main market to apply for a secondary listing in Hong Kong. Together with the other two recognized stock exchanges in Southeast Asia – the Indonesian Stock Exchange and the Singapore Exchange – there are now 20 RSEs across 18 countries, HKEX said in a statement on Monday.Hong Kong’s flagship carrier Cathay Pacific Airways plans to hire more talents from the Chinese mainland, including flight attendants and pilot trainees. Cathay Pacific has already started hiring, having held a series of recruitment events for flight crew members in the Chinese mainland over the weekend.

Voices of ASEAN

"In promoting economic growth, China has always advocated for progress while maintaining stability," recently stated Ong Tee Keat, former Malaysian Minister of Transport and Chairman of the Asia-Pacific Belt and Road Coordination Council, in an exclusive interview with 21st Century Business Herald. Discussing China's 2025 economic growth target of around 5 percent, Ong highlighted the significance of China's "stabilizing foreign investment and foreign trade" strategy, noting that it provides confidence to global trade partners. He emphasized that China's economic stability serves as a driving force for boosting regional and global economies.

As China's largest trading partner and a key destination for Chinese investment, ASEAN has deepened economic ties with China. By July 2024, two-way investment between China and ASEAN exceeded USD400 billion, with China ranking as ASEAN's second-largest foreign investor. Ong stressed that ASEAN countries hope Chinese enterprises will not only expand overseas markets but also collaborate with local tech firms to enhance regional R&D capabilities, which could facilitate the global adoption of Chinese technological standards and "soft power." He identified digital and green economies as priorities for future China-ASEAN cooperation.

Marking the third anniversary of the Regional Comprehensive Economic Partnership Agreement (RCEP), Ong proposed leveraging China's mature production capacity to establish localized manufacturing in RCEP member states under China’s smart manufacturing model. This approach, he argued, would reshape global supply chains, utilizing China's industrial strengths to empower Belt and Road/RCEP partners to develop self-reliant R&D capabilities.

Next on industry and company news

China's car sales inched up 1.3 percent in the first two months of 2025 from the same period a year earlier. Passenger vehicle sales rose 26.1 percent year-on-year to 1.41 million units in February, following a 12 percent fall in January, data from the China Passenger Car Association (CPCA) showed on Monday. The production, sales and export of new energy vehicles all increased by more than 50 percent, it said.Baidu announced it will offer USD2 billion of zero-coupon convertible bonds due 2032 that can be exchanged into Trip.Com Group's stock listed on the Hong Kong bourse at about 43 percent premium over the Chinese online travel giant's current share price.JD.Com announced it has become the official e-commerce innovation partner of the UEFA Champions League. The Chinese firm will also partner with other UEFA events and open an official UEFA Champions League online shop in China, it added.DeepSeek-R1 is now available in Amazon Web Services' AI platform Amazon Bedrock, making AWS the first cloud service provider to deliver DeepSeek-R1 as a fully managed, generally available model, Amazon’s web services unit announced today.Leapmotor established a 10-member research team to study the prospects of robotics, according to Chairman and CEO Zhu Jiangming. Zhu believes that carmakers with self-develop capabilities have abundant resources in AI algorithm, computing, and motion control, so they should also be able to develop robots.

Switching gears to financial news

South Korean investors ramped up their trading in Chinese stocks last month, hitting a two-and-a-half-year high, fueled by a surge in tech companies. In February, South Korean investors traded USD782 million of shares listed in China's mainland bourses or Hong Kong, almost a threefold increase from January, hitting the highest level since August 2022. This far exceeded their transactions in European and Japanese stock markets during the same period, according to the latest data from the Korea Securities Depository and Clearing Corporation.

Wrapping up with a quick look at the stock market

Chinese stocks rose on Tuesday. The benchmark Shanghai Composite gained 0.4 percent and the Shenzhen Component edged up 0.3 percent. Hong Kong’s Hang Seng index closed flat and the TECH index added 1.4 percent.