Chinese Stocks Break NPC Jinx With Bold Growth Goal, Tech Rally
(Bloomberg) -- Chinese stocks climbed on Wednesday, with technology names driving the gain after Beijing vowed more support for the sector and set an ambitious economic growth target as the nation’s most important annual political gathering got underway.
The MSCI China Index rose as much as 2.7% and was headed for its best gain in a week. It had declined on the first trading day of the National People’s Congress for each of the past five years. A gauge of shares listed in Hong Kong climbed 3.1%, with a measure of tech stocks up 4%.
The strong showing came as Chinese leaders kicked off the NPC by maintaining a growth goal of about 5%, a target seen harder to achieve this year given rising trade tensions with the US and unabated geopolitical uncertainties. Beijing’s resolve to stick to the aim spurred bets that there’s more stimulus to come, with sentiment boosted further by a fresh pledge to bolster technologies from artificial intelligence to quantum computing.
“There’s nothing to nitpick. Just a robust growth target, and a clear intention to support the economy,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “This should be reassuring to markets.”
In his opening address to the NPC, Chinese Premier Li Qiang said the nation will advance development of strategic emerging industries and carry out initiatives on the large-scale application of new technologies. “We will establish a mechanism to increase funding for industries of the future and foster industries such as biomanufacturing, quantum technology, embodied AI, and 6G technology,” Li said.
Chinese chip, quantum computing and robotics shares rallied, with chipmaker Hua Hong Semiconductor Ltd. gaining 7.4% in Hong Kong and robotics-related Jiangsu Hengli Hydraulic Co. finishing up 5.7% in Shanghai. That helped Hong Kong-listed Chinese stocks extend their 2025 outperformance against mainland peers. The CSI 300 Index, a benchmark of onshore shares, ended the day just 0.5% higher.
“The NPC report showed better-than-expected government support for the China technology sector while general economic targets are in line with expectations,” said Gary Tan, a portfolio manager at Allspring Global Investments. “This helped the HK markets which have higher exposure to technology names than onshore markets.”
Earlier this year, Chinese AI startup DeepSeek unveiled technologies that reshaped the industry’s global landscape and caused a rout in the shares of its major Western rivals.
Ahead of the NPC, many market participants had argued that China would have to enact more forceful measures to strengthen its economy as US President Donald Trump’s tariff salvos add to its existing challenges of deflationary pressures and a property crisis.
Chinese equities came under pressure ahead of the event as rising trade frictions dented a rally driven by enthusiasm about the country’s artificial intelligence breakthroughs. The MSCI China Index fell more than 4% last week, snapping a six-week advance.
While stocks climbed on Wednesday, some investors said the first day of the NPC, which will end on March 11, lacked any major positive surprises to keep the rally going in the near term as the economic projections were largely in line with expectations. To them, Beijing may have decided it wants to save some ammunition to ward off any more trade blows from Trump.
“These numbers were largely in line with what we had expected actually,” said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments. “We will really not make any changes to the portfolio till next week when we can fully digest the information.”
Elsewhere, the offshore yuan lost as much as 0.3% against the dollar. Yields on China’s 10-year government bonds slipped one basis point to 1.75%.
The yuan has been in the spotlight since trade tensions with the US escalated. China’s central bank has maintained efforts to fend off excessive currency weakness, including setting the yuan’s reference exchange rate Wednesday at the strongest level since Feb. 21.
--With assistance from Winnie Hsu, Charlotte Yang, Wenjin Lv and John Cheng.
(Updates with closing levels and comments)