The National People's Congress convened in Beijing on March 5, with the government work report outlining a series of policy objectives. The focus remains on promoting stable economic growth through appropriate fiscal expansion, positioning the expansion of domestic demand and technological innovation as key priorities for driving economic growth this year.

The annual growth target has been set at "4.5% to 5%, with efforts to achieve better results in practical work." A more proactive fiscal policy will continue, with the budget deficit ratio maintained at 4% of nominal GDP, an increase of 230 billion yuan compared to 2025. Additionally, plans are in place to issue 1.3 trillion yuan in ultra-long-term special central government bonds to continue supporting key construction projects and new initiatives. Other significant targets include maintaining the urban surveyed unemployment rate at around 5.5%, keeping the rise in the consumer price index at approximately 2%, ensuring that growth in resident income keeps pace with economic growth, maintaining a basic balance in the international payments, and reducing carbon dioxide emissions per unit of GDP by about 3.8%. Monetary policy will maintain its "appropriately accommodative" stance, with a key focus on promoting stable economic growth and a reasonable rebound in prices. The central bank may flexibly deploy various policy tools to ensure ample liquidity.

Beyond traditional fiscal and monetary policies, the meeting emphasized expanding domestic demand and technological innovation as priorities for driving sustainable growth. For domestic demand, measures include arranging 250 billion yuan in ultra-long-term special treasury bonds to support consumer goods trade-ins and establishing a 100-billion-yuan special fund for fiscal and financial coordination to boost domestic demand. In technological innovation, efforts will deepen the "AI Plus" initiative, accelerate the promotion of new-generation smart terminals and intelligent agents, advance the commercial and large-scale application of artificial intelligence in key sectors, expedite the development of satellite internet, and create an upgraded version of "5G + Industrial Internet."

J.P. Morgan Asset Management views the overall policy environment this year as positive and pragmatic. The 4.5% to 5% growth target lays a foundation for reaching the level of moderately developed countries in per capita GDP by 2035, while also accounting for the high uncertainty and significant growth challenges in the current environment. This suggests that quality may be prioritized over quantity in this year's policy framework. The phrase "efforts to achieve better results in practical work" reflects the government's proactive stance.

To achieve this pragmatic goal, a 4% budget deficit has been maintained to support overall investment, particularly against a backdrop of still-weak private investment. Given the persistent interest rate differential with the United States and the limited effectiveness of previous rate cuts in stimulating household borrowing, monetary policy may prioritize price stability over aggressive easing.

The absence of unexpectedly strong stimulus measures for the property sector and the prioritization of the government's ten key tasks indicate that domestic demand and technological innovation are likely to become important pillars for driving economic growth this year. More resources are expected to be directed towards these areas, and this structural economic transformation could create corresponding opportunities in the stock market for companies aligned with these strategic priorities.