Third Plenum Announcement Focused On Economic Growth Driven by Technological Progress and Quality Workforce

Li Chen
19 Jul, 2024
Hong Kong

Market indexes in Shanghai and Hong Kong struggled after policymakers failed to make any major announcements at the conclusion of the much-delayed third plenum. 

The gathering of top policymakers in Beijing, closely watched by foreign and domestic investors, is a forum where national priorities are set for the next five years. 

However, before the much-delayed gathering of the top 205 policymakers, investors had low expectations of any major announcement as the Chinese leadership struggled with elevated debt, falling consumer demand, rising capital flight, and trade tensions with the U.S. and the European Union. 

At the conclusion of a four-day event last night, Chinese policymakers released a summary statement that was vague and short, and President Xi Jinping urged lawmakers to stick to the priorities set by the government, which focus on technological progress and improved governance. 

The committee stressed that China would continue to accelerate reforms in rural land, environmental protection, taxation, national security, and the economy.

China's policymakers are navigating the economy away from construction-led growth to advanced technologies such as artificial intelligence, advanced computing, and renewable energy. 

The Chinese yuan weakened to 7.28 against the U.S. dollar, and the yield on the Chinese government bonds held steady at 2.27%. 

Investors shifted their attention to the Politburo meeting, China's committee of top leadership, at the end of the month for specific policy announcements. 

 

China Stock Movers 

The Hang Seng index declined 2.1% to 17,401.86, and the CSI 300 index gained 0.1% to 3,524.62. 

Property developers dropped sharply in Hong Kong after the release of the policy announcement at the end of the third plenum. 

Longfor Group declined 5.4% to HK $10.74, China Resources Land decreased 2% to HK $27.65, China Vanke decreased 4.1% to $4.68, and CK Hutchison Holdings decreased 0.5% to HK $40.65.

Tech stocks were also under pressure amid weak market sentiment in Hong Kong. 

Tencent decreased 0.9% to HK $365.80, Alibaba Group declined 2.7% to HK $73.75, and Baidu plunged 1.6% to HK $88.0.