Welcome to this week’s Great Game where we turn our attention to China. The Communist Party is annual National People’s Congress where Premier Li Qiang (Xi’s right hand mand) delivered a very noteworthy speech on the Central Committee’s financial and political plans. Watching a speech from a Chinese politician is a very different beast from watching top US politicians address the masses. The Chinese leaders are notoriously opaque, measured and understated and carefully curate each word since it’s both directed at the general population and the millions of party officials around the country, who are expected to actually implement the plans in the speech.

In short, Li Qiang’s speech only strengthened our view on China and our China-related proxy bets on South Korea and certain commodities. But to be more specific – what’s my three takeaways?

Consumer-driven growth

The main headline of the speech was obviously the annual growth target, which was placed at 5%. This is slightly below the realized 2023 level of 5.2%, but that number was achieved with 2022 (the year of lockdowns) as the benchmark year, so 5% growth target can be sold as quite ambitious internally in China while still being quite realistic to actually achieve.

As discussed in last week’s Portfolio Watch, Chinese GDP forecasts have not seen the same uptick as the US despite expected financial stimulus out of Beijing, but remain within striking distance of the 5% target.

What’s more, Li Qiang promised a wave of stimulus especially