China ** Daily reporter Liu Ming Ren Ziqing Wu Jun The two sessions of the National People's Congress in 2024 are about to be held, and the policy direction of the two sessions has an important impact on the economy and capital market, and has also received widespread attention from private equity institutions. What are the concerns of this year's National Two Sessions? What are the expectations of investors? In this regard, China ** Daily interviewed Zhang Zhiwei, President and Chief Economist of Baoyin Investment, Yu Dingheng, Chairman and Investment Director of Yihu Investment, Yang Jun, ** Manager and Founding Partner of Huaxia Future Capital, Kou Zhiwei, Partner of Chongyang Investment, Fang Lei, Deputy General Manager, Senior Partner and Senior Manager of Xingshi Investment, and He Yunfeng, Co-founder and Executive Director of Jingyan Private Equity. Their core points are as follows:
Zhang Zhiwei, President and Chief Economist of Baoyin Investment:The policy of the two sessions will focus on three directions: first, fiscal policy, the fiscal deficit is expected to be slightly higher than last year, and the issuance of special treasury bonds of a certain scale may be clearly proposed; The second is monetary policy, which may clarify guidelines such as interest rate cuts and RRR cuts; Finally, there is the industry policy. 
Yu Dingheng, Chairman and Investment Director of Yihu Investment:"New quality productivity" is different from the traditional real estate and infrastructure investment-driven, get rid of the extensive growth model of the past, is a high-quality development model, including digital economy, energy conservation and emission reduction, artificial intelligence, etc., these industries with industrial trends, but also the direction of policy support and encouragement. 
Yang Jun, Manager and Founding Partner of ChinaAMC Future Capital:Both from the perspective of the economy and the capital market, we are currently at the low level of the cycle, and we are optimistic about the market in 2024. We are optimistic about semiconductors, new materials, new technologies, and biological industries with good prospects for future development. In addition, in the context of the gradual recovery of the economy, the traditional consumer industry is also worth looking forward to. 
Fang Lei, deputy general manager of Xingshi Investment:The market usually has certain expectations for the stable growth policy and industrial policy to be announced by the two sessions, and the policy expectation game will be an important factor affecting the performance of the capital market before the two sessions, and capital transactions are relatively active before and after the two sessions. 
Kou Zhiwei, partner of Chongyang Investment:"New quality productivity" is born by technological revolutionary breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading, with a substantial increase in total factor productivity as the core symbol, characterized by innovation, and essentially advanced productivity. 
He Yunfeng, co-founder and executive director of Jingyan Private Equity:It is expected that this year's two sessions will make major arrangements in comprehensively deepening reforms, developing new quality productive forces, promoting high-quality development, and improving people's livelihood and well-being. Focus on GDP growth targets, fiscal and monetary policy arrangements, and substantive measures to develop new quality productivity. OneFocus on economic growth targets, fiscal and monetary policiesWe look forward to deepening reform and promoting high-quality developmentChina ** Daily: With the advent of the National Two Sessions, what are your expectations for this year's Two Sessions, and what will you focus on? He Yunfeng:This year marks the 75th anniversary of the founding of the People's Republic of China and a crucial year for achieving the goals and tasks of the 14th Five-Year Plan. It is expected that this year's two sessions will make major arrangements in comprehensively deepening reforms, developing new quality productive forces, promoting high-quality development, and improving people's livelihood and well-being. Focus on the 2024 GDP growth target, fiscal policy and monetary policy arrangements, and substantive measures to develop new quality productivity. Kou Zhiwei:What we are most concerned about is how to set our economic growth targets for the whole of this year. In line with the annual economic growth target, the annual fiscal budget deficit and the scale of local ** special bonds. Yang Jun:This year's economic growth target is particularly important and is the primary focus of the two sessions. **The economic work conference mentioned that a new round of fiscal and taxation system reform is planned, and the long-term direction of the reform is to solve the current situation of the imbalance between the financial power and administrative power of the central and local governments, and pay attention to whether the budget deficit can be moderately increased this year in the short term. In addition, pay attention to the tone and deployment of key industrial policies. Yu Dingheng:We are more concerned about the implementation and progress of the spirit of the first economic work conference at the end of last year, especially how the three principles of "seeking progress in stability, promoting stability with progress, and establishing first and then breaking" are reflected in the work at the first level. Zhang Zhiwei:Macroeconomic policy is an important direction worthy of attention. This year's economic growth target is expected to remain at around 5 percent, similar to last year's. In terms of policy, we will focus on three directions: first, fiscal policy, which is expected to be slightly higher than last year's fiscal deficit, and may clearly propose the issuance of a certain scale of special government bonds; The second is monetary policy, which may clarify guidelines such as interest rate cuts and RRR cuts to help the economy enhance domestic demand; Finally, there are industry policies, such as consumption and equipment updates, which have been proposed in the ** meeting, and the two sessions may elaborate on these policies. Fang Lei:Under normal circumstances, the overall tone and overall goals of the two sessions will be consistent with the previous year's ** economic work conference. For this year's two sessions, we focus on two aspects of policy expression. First, the medium-term policy efforts to stabilize the economy and stabilize expectations, especially the fiscal and monetary policies. The market is generally more concerned about the deficit ratio announced in the work report and whether there will be a special government bond. The general direction of monetary policy easing is basically determined, or there is still a need for "structural adjustment". The second is the policy layout of long-term high-quality development, mainly the focus of industrial policy. At the end of last year, among the nine key tasks deployed by the first economic work conference, "scientific and technological innovation leads the construction of a modern industrial system" ranked first. We expect that the work report will have a more detailed deployment of industrial development and transformation, and may have a clearer direction of development. IIThe economic growth target for 2024 is expected to be around 5%.We are confident that we will achieve our economic growth target for the whole yearChina ** Daily: What are your expectations for the economic growth target in 2024, and what is the expected economic growth rate for the whole year? Fang Lei:We expect that the economic growth target for this year's two sessions may be set at around 5%. Kou Zhiwei:Based on the information of the two sessions of various provinces in January, the national economic growth target this year is likely to remain at about 5%. Objectively speaking, this year compared with 2023, there is no low base effect, and it is more difficult to achieve the 5% growth target. While setting higher growth targets, we believe that the policy is also better prepared. Last week, the meeting of the Financial and Economic Committee studied and deployed a new large-scale equipment renewal and consumer goods trade-in policy, compared with similar policies launched in 2022, the policy is set at a higher tone and is expected to be stronger, demonstrating the determination to achieve the annual economic growth target. We are confident that we will achieve our 5% economic growth target for the full year. Yang Jun:The economic growth target for the whole of 2024 is expected to remain at around 5%. The growth target of about 5% is basically in line with the potential economic growth rate, and a more aggressive growth target can effectively raise the price level in 2024 and boost the economic expectations of the whole society. It is expected that the annual economic growth rate can achieve the target of 5%. He Yunfeng:It is estimated that the economic growth in 2024 will be based on the principles of seeking progress while maintaining stability, promoting stability by progress, and establishing first and then breaking down, while maintaining a reasonable economic growth target, more emphasis will be placed on high-quality development, and the policy is expected to strengthen the counter-cyclical and cross-cyclical adjustment of macro policies, and continue to implement a proactive fiscal policy and a prudent monetary policy. The economic growth rate is expected to be around 5% in 2024. Yu Dingheng:Judging from the expositions on maintaining strategic focus, new development pattern, and high-quality development put forward in the ** Economic Work Conference, we believe that the economy in 2024 will place more emphasis on high-quality development. IIINew quality productivity is an intrinsic requirement for promoting high-quality developmentChina ** Daily: Focusing on the local two sessions, "new quality productivity" has become one of the high-frequency words, how do you understand this? Fang Lei:"New quality productivity" was first proposed in September 2023, and we believe that it represents a new type of productivity in the direction of new technologies, new industries, new models, and new kinetic energy, which is an important part of promoting China's long-term economic development. At present, China is in an important period of economic momentum transformation, and the pull force of "old drivers" such as real estate on the economy is gradually weakening, and we need to find new economic pull forces. "Developing new quality productivity" is a requirement for expanding domestic demand, an inherent requirement and an important focus for promoting high-quality development. Whether it is to overcome the problem of "stuck neck" or to open up new areas of development, innovation will play a major role, and the formation of new quality productivity needs to focus on the development of strategic emerging industries and the cultivation of future industries. Corresponding to the secondary market, the primary industries related to "new productivity" include computers, electronics, communications, power equipment, machinery and equipment, automobiles, medicine and biology, etc. Kou Zhiwei:"New quality productivity" is born by technological revolutionary breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading, with a substantial increase in total factor productivity as the core symbol, characterized by innovation, and essentially advanced productivity. At present, China is in a critical period of switching between old and new growth drivers, relying on real estate and large-scale infrastructure to promote economic growth is no longer working, and only through innovation can we achieve effective qualitative improvement and reasonable quantitative growth of the economy. Innovation covers a wide range of areas, including scientific and technological innovation, industrial innovation, development mode innovation, and institutional innovation. Now that the new quality of productivity has become a high-frequency word, it is actually a process of unifying understanding and forming a joint force from the official to the non-governmental. Zhang Zhiwei:"New qualitative productivity" refers to a new form of productivity relative to the past productivity, which emphasizes innovation, intelligence and efficiency. The development of new quality productivity requires the cooperation of both the market and the world. The market needs to find the right direction of development,** and it should provide support and guidance. China's exports of new energy vehicles and related materials are typical cases of new quality productivity. According to the data, China's vehicle exports will reach 4.91 million units in 2023, ranking first in the world for the first time. Why China's auto industry has created a miracle in the past few years is based on the fact that the three forces of China's auto industry have worked together in one direction. He Yunfeng:"New quality productivity" is the quality of advanced productivity in which innovation plays a leading role, and it is characterized by innovation. Historically, innovation has been the key driving force for human social progress and economic growth, and new quality productivity should become the leading force in China's economy and drive the upgrading and development of the whole society. In this process, the capital market plays a role in allocating resources, and should also lean in the direction of "innovation" and mobilize market forces to contribute to the development of new quality productive forces. Yu Dingheng:We believe that "new quality productivity" is different from the traditional productivity driven by real estate and infrastructure investment, and it will get rid of the extensive growth model of the past and transform into high-quality development, supporting and encouraging industries with industrial trends such as digital economy, energy conservation and emission reduction, and artificial intelligence. Yang Jun:The connotation of the new quality productivity is to establish a production function led by scientific and technological innovation, get rid of the traditional model of relying on the accumulation of production factors to promote development, and make extensive use of new technologies such as big data, artificial intelligence, the Internet, and cloud computing to transform traditional industries and give birth to new business formats. FourthPolicy support is expected in a number of directionsChina ** News: Which industries and sectors do you expect to receive strong policy support after the two sessions? Fang Lei:The technology sector and the domestic demand sector are expected to receive strong policy support respectively, corresponding to the demand for domestic structural adjustment and stable growth. The first is the digital economy, the current support policies for the digital economy are mainly focused on the construction of data infrastructure, and it is expected that the follow-up related policies will continue to be introduced, especially for the "bottleneck" areas, such as communications, computers, media and electronics industries. Second, consumption is still an important starting point for expanding domestic demand this year, and the Ministry of Commerce has identified 2024 as the "Year of Consumption Promotion", saying that it will adhere to the two-wheel drive of "policy + activity". It is expected that the follow-up consumption policy will start from several aspects, for example, by improving consumption conditions and optimizing the consumption environment, further transforming residents' consumption willingness into actual consumption, or promoting the trade-in of original consumer goods through supply-side reform of consumer goods. In addition, the concept of "silver economy" is expected to be further clarified. The third is energy conservation and carbon reduction, and in February, the state issued the "Advanced Level of Energy Efficiency, Energy Conservation Level and Access Level of Key Energy-using Products and Equipment (2024 Edition)", reflecting the importance of energy conservation, emission reduction and green development. The promotion of policies such as energy conservation and emission reduction will accelerate the "survival of the fittest" within related industries, which may stimulate investment in technological transformation and have a certain effect on the demand of related industrial chains. Yu Dingheng:At present, several relevant policies have been introduced, and on February 19, the State-owned Assets Supervision and Administration Commission held a special promotion meeting on "AI empowering industrial renewal" enterprise artificial intelligence, emphasizing that enterprises should put the development of artificial intelligence in the overall work of overall planning, further promote industrial renewal, and accelerate the layout and development of intelligent industries. It is necessary to consolidate the basic foundation for development, concentrate the main resources on the most needed and advantageous areas, accelerate the construction of a number of intelligent computing centers, further deepen open cooperation, and better play the role of cross-central enterprise collaborative innovation platform. In addition, it is the fourth meeting of the Financial and Economic Committee, which emphasizes the promotion of the renewal of equipment and the trade-in of consumer goods, and encourages the trade-in of traditional consumer goods such as household appliances. On the whole, the capital market has a higher degree of recognition of AI as a new industry trend, and the market has better performance reflected in the market. Yang Jun:The context of industrial policy can be grasped from the concept of "new quality productivity" and the theme of the fourth meeting of the Financial and Economic Committee. It is expected that after the two sessions, new business formats such as digital economy, quantum technology, life sciences, and humanoid robots will be deployed; ** The latest key energy-using products and equipment listed in departmental documents are the support direction of a new round of equipment renovation; Consumption subsidies for durable goods such as automobiles and home appliances are also worth looking forward to. Zhang Zhiwei:Pay close attention to policy guidance and market conditions, and investment opportunities may involve new energy, science and technology and other fields. He Yunfeng:Policies usually focus on solving problems and promoting development, so we expect to see more specific and targeted policy details in boosting real estate and durable goods consumption after the two sessions, such as large-scale equipment renewal. In the construction of a modern industrial system and the promotion of the development of new quality productivity, we will see more and more vigorous policy measures, such as industrial automation and intelligence, green and low-carbon development, etc. Therefore, the advanced manufacturing industry will become the intersection of the two directions, and it is expected to receive more concentrated policy support, which is worth paying attention to. FiveIt is expected that the performance of the A** field will be stableThe policy direction is of great guiding significance to investmentChina ** Daily: How will the convening of the National People's Congress and the National People's Congress have an impact on the capital market? Fang Lei:The market usually has certain expectations for the stable growth policy and industrial policy to be announced by the two sessions, and the policy expectation game will be an important factor affecting the performance of the capital market before the two sessions, and capital transactions are relatively active before and after the two sessions. Historically, there is a certain "calendar effect" before and after the two sessions, and the performance is better in the first 1 or 2 weeks of the two sessions, with the policy clarity and gradual landing, the probability of the two sessions after the two sessions has also increased, especially those in the direction of policy boost, the industrial policy of the two sessions has an important guiding significance for A-share investment. Yang Jun:The two sessions were held in early March, which was in the vacuum period of macroeconomic data at the beginning of the year and the observation period of the resumption of work and production after the Spring Festival. Historically, A-shares tend to perform well in the two weeks before and after the two sessions, with small-cap growth in the early stage and good performance in the later stage. Yu Dingheng:Generally, during the two sessions, the market may show more stable expectations. Historically, there will be spring turmoil every year, around the two sessions, the improvement of liquidity and the work deployment throughout the year, there will be corresponding performance in the capital market, and the overall market performance is expected to be relatively stable. He Yunfeng:The two sessions of the National People's Congress are an important window to set the tone for the economy throughout the year, and they will inevitably play an important leading role in the capital market, but the fluctuations in the market during the two sessions are also normal. The macroeconomic development background and economic policy background will vary from year to year, so we believe that there is no need to read too much into the market volatility during the two sessions. SixThe positives are accumulatingRemain optimistic about this year's A** fieldChina ** News: What is your assessment of the overall trend of A-shares in 2024? What are the investment opportunities to look out for? He Yunfeng:We believe that with the stable operation of the macroeconomy and the optimized operation of the capital market in 2024, A-shares will provide investors with the opportunity to obtain positive returns, especially in the context of global scientific and technological innovation, the development of China's new quality productivity will make the advanced manufacturing industry present a good investment opportunity. If the pace of economic growth becomes clear in the second half of the year, and the operating performance of outstanding listed companies is realized, it will be very noteworthy. Fang Lei:After a long period of valuation compression, the current valuation of A-shares is in an extremely low state, and the market's concerns about long-term factors and transaction level have been more priced in **, and the impact of suppressive factors on sentiment and trends has weakened at the margin. At present, the positive factors are boosting market sentiment, and the endogenous activity of the market is gradually warming up with sentiment, and mean reversion may be an important driver for the A** market in 2024. We believe that the market investment opportunities in 2024 are mainly divided into two aspects. The first is the investment opportunities in core asset classes driven by mean reversion. Second, from a long-term perspective, technological breakthroughs are the main driving force for subsequent economic development, and they are also the relative main line of investment, focusing on investment opportunities in the fields of medicine and science and technology. Yang Jun:Both from the perspective of the economy and the capital market, it is currently at the low end of the cycle, and we are optimistic about the market in 2024. We are optimistic about semiconductors, new materials, new technologies, and biological industries with good prospects for future development. In addition, in the context of the gradual recovery of the economy, the traditional consumer industry is also worth looking forward to. Yu Dingheng:At present, the systemic risks of A-shares have basically been released in place, and they mainly reflect the fundamental trend. If we maintain a proactive fiscal policy and a precise and effective monetary policy throughout the year, the overall new and old momentum is still in the process of conversion, and it is estimated that there will be a large bull market**. But see you with faith.
At the bottom of the rebound, there will be structural opportunities in the market, and we will select the best model around the industry trend and select high-quality companies that are less affected by the economic cycle.
SevenThe system and mechanism have been gradually improvedPromote the healthy and standardized development of the capital marketChina ** Daily: Do you have any suggestions for the healthy development of the capital market? Yang Jun:A balanced investment and financing environment is crucial to the long-term healthy development of the capital market. In addition, a sound legal system is also the basis for the healthy operation of the capital market, and only by ensuring that there are laws to follow in all aspects of financing and investment, and violations must be prosecuted, can the capital market give full play to its value. He Yunfeng:The cornerstone of the capital market is listed companies, so the healthy development of the capital market is also based on the healthy, high-quality and standardized operation of listed companies. It is hoped that the reward and punishment feedback mechanism will more sensitively encourage listed companies to create value and give back to shareholders, and have more timely measures to deal with inferior companies that cannot create value. At the same time, investors and other relevant entities should also strengthen fairness, standardize behavior, and take multiple measures at the same time, so that the capital market can enter a virtuous circle and effectively become an effective boost for the development of the real economy. Fang Lei:The healthy development of the capital market is inseparable from the efforts of many parties, including regulators, listed companies, and investors. In terms of supervision, we can see that the relevant systems of the capital market are constantly improving, and it is recommended that follow-up supervision should improve the system in terms of improving market transparency, the quality of listed companies, and investor-oriented. It is expected that in the follow-up strict regulatory environment, the capital market environment will be gradually optimized, and investors' confidence in China's capital market will be further enhanced. Zhang Zhiwei:**The market and capital market are a reflection of the real economy. From the perspective of addressing the root causes, I believe that the problem of insufficient domestic demand on the macroeconomic side should be resolved. It is suggested that fiscal policy should be strengthened to support consumption by increasing the fiscal deficit and promote the balance between supply and demand. Yu Dingheng:There are mainly the following three suggestions: First, the "national team" as a stable force in the market that cannot be ignored, has a strong role as a weather vane, and the relevant operations hope to give the market more clear expectations. Second, it is hoped that the regulator will pay more attention to the market itself to ensure a fair and just trading environment and market stability. The third is to minimize intervention when the invisible hand of the market does not fail, and give full play to the self-regulating role of the market. Editor: Xiaomo Review: Xu WenA series of reports on the two sessions