China unveils first glimpses of five-year plan
MAINLAND CHINA & HONG KONG
China unveiled the first glimpses of its economic plans for the next five years, promising to build the nation into a technological powerhouse as it emphasised quality growth over speed.
Initial details released by the Communist Party’s Central Committee Thursday (29 October) stressed the need for sustainable growth and pledged to develop a robust domestic market. The communique published by state media following a four-day closed-door meeting did not specify the pace of growth policy makers would target.
The new plan elevated China’s self-reliance in technology into a national strategic pillar, a move signalled by officials from President Xi Jinping down in the lead up to the meeting. Central to that endeavour is self-reliance in chips, the building blocks for innovations from artificial intelligence to fifth generation networking, and autonomous vehicles.
Laying out their vision for the next 15 years, officials said “making major breakthroughs in core technologies in key areas, China will become a global leader in innovation”, according to the communique published by Xinhua.
Beijing’s efforts are gaining urgency as the US seeks to contain the rise of its geopolitical rival. The US has pressured allies to shun equipment from Huawei Technologies Co Ltd, barred dozens of China’s largest tech companies from buying American parts, and even slapped bans on ByteDance Ltd’s TikTok and Tencent Holdings Ltd’s (700 HK) WeChat.
“Technology is the key now in the next area of development of China,” said Wang Huiyao, an adviser to China’s cabinet and founder of the Center for China and Globalisation. “It’s a key area that China wants to give more attention, more resources and more development. I think that’s basically for China’s development in the future.”
Unlike the last five-year plan, which sought to achieve “medium-to-high growth” in order to build a “moderately prosperous society”, this plenum had been expected to focus on the quality rather than the pace of growth. In Thursday’s statement, officials pledged to stick to a strategy of boosting domestic demand and opening up the economy over the next five years.
Even though the plan does not mention a specific rate of growth for gross domestic product (GDP), analysts said the government remains ambitious in its outlook.
“The leadership still expects the size of the economy, household income as well as GDP per capita to reach a ‘new milestone’ by 2035,” said a market watcher. “China did not abandon GDP targeting, it’s just expressed in a more subtle way.” – Bloomberg News.
The Shanghai Composite Index inched 0.11% higher to 3,272.73 while the Hang Seng Index fell 0.49% to 24,586.60.
REST OF ASIA
India stocks fell, tracking peers across Asia, as rising coronavirus infections and tougher lockdowns added to worries about the economic hit from the pandemic.
The S&P BSE Sensex Index declined 0.43% to 39,749.85 in Mumbai on Thursday (29 October), while the NSE Nifty 50 Index also fell by 0.50%. If the pace holds through Friday, the drop in both measures is set to be the steepest of any full week since the end of September. The gauges may be more volatile than usual with the expiry of monthly derivative contracts later Thursday.
Stocks fell in most Asia markets following a selloff in US and Europe equities amid renewed fears of a deeper recession. India’s economy is headed for a record contraction after a nationwide lockdown shuttered most shops and businesses for months.
“Rising COVID-19 cases globally, specifically in Europe and the US are worrying investors as strict lockdowns could be imposed and a nascent economic recovery could once again get hit,” a market watcher wrote in a note Wednesday evening.
As earnings continue, 13 of the 25 Nifty 50-member companies that have announced results so far have beaten or matched estimates, 11 have missed predictions, while one is not comparable.
The rupee weakened 0.2% to 74.0237 per US dollar, while the yield on the 10-year government bond was little changed at 5.86%. – Bloomberg News.
South Korea’s Kospi Index declined 0.67% to 2,311.12 at the open on Friday after losing 0.79% to 2,326.67 on Thursday.
Australia’s S&P/ASX 200 Index opened 0.13% higher to 5,967.80 on Friday morning. It lost 1.61% to 5,960.30 on Thursday.
The Taiwan Stock Exchange Weighted Index fell 1.02% to 12,662.91.
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