What do investment banks think of the Chinese Communist Party’s long-overdue third plenum?

Name: SCMP
Telephone: +852-2680-8888

Offering little in the way of details, the communique outlined China’s broad reform packages over the medium and longer term

Reading Time:4 minutes

Why you can trust SCMP

Members of the Chinese Communist Party’s Politburo Standing Committee during the third plenary session of the party’s Central Committee on July 18, 2024 in Beijing. Photo: Xinhua.

Zhang Shidongin Shanghai

Published: 12:33pm, 19 Jul 2024Updated: 3:35pm, 19 Jul 2024

China’s Communist Party has published a communique after wrapping up its four-day closed-door third plenum for its decision-making Central Committee. Investment banks rushed to read between the lines for clues about the trajectory of the world’s second-largest economy.

Offering little in the way of details, the communique outlined China’s broad reform package over the medium and longer term, focusing on technology innovation, the new-quality productive force, risk control and supply-chain security. The words and policy framework are very consistent with what top policymakers emphasised before the high-stakes gathering.

Still, the stock market was let down in its search for short-term fixes, as the benchmark index declined in Hong Kong after the communique. The renminbi extended its depreciation against the US dollar and China’s 10-year government bond rose in haven trade, driving its yield further down.

One bright spot of the plenum was the government’s specific reference to China’s 2024 economic growth target, pegged at about 5 per cent, raising speculations that a raft of policies to support and stimulate the economy will be released. A meeting of the party’s all-powerful political bureau scheduled in late July may be the occasion for the policy details.

Here are the takes from the world’s major investment banks and asset managers on the third plenum:

Goldman Sachs’ analysts led by Lisheng Wang and Hui Shan: