Annual Report 2024

34 China Merchants China Direct Investments Limited Annual Report 2024 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) PROSPECTS (CONTINUED) The Central Economic Work Conference held in December 2024 set the direction for China’s economic development in 2025. For 2025, efforts will be made to maintain steady economic growth, keep employment and prices generally stable, ensure basic equilibrium in the balance of payments, and promote increases in personal income in step with economic growth. Nine key tasks were mentioned in the conference. The first was to vigorously boost consumption and increase investment efficiency, while expanding domestic demand on all fronts as well. Special campaigns dedicated to stimulating consumption should be implemented. And efforts should be made to increase the incomes and alleviate the burdens of low- and middle-income groups, so as to increase their ability, willingness and level of consumption. The second was to drive the development of new-quality productivity through scientific and technological innovation, and to build a modernised industrial system. It urges the country to strengthen basic research and strive for breakthroughs in key and core technologies, adopt forward-thinking arrangements for major technological projects, and conduct large-scale demonstrations of the application of new technologies, products and scenarios. The third was to give full play to the driving role of economic system reform, and to promote the implementation of landmark reform measures effectively. The initiative to deepen and upgrade the reform of state- owned enterprises should be completed in a high-quality manner. A private sector promotion law should be rolled out. And special campaigns to standardise law enforcement involving enterprises should be conducted. The fourth was to expand high-standard opening up while keeping foreign trade and foreign investment stable. Work should be done to expand voluntary and unilateral opening up in an orderly manner, steadily enhance institutional opening up, push to improve the quality and efficiency of pilot free trade zones and expand the mandate for reform tasks, and accelerate the implementation of core policies of the Hainan Free Trade Port. The fifth was to effectively prevent and defuse risks in key areas to ensure that no systemic risks occur. It urges the country to continue to work to reverse the downturn of the real estate market, further advance the renovation of shanty towns in cities and dilapidated houses, and fully unleash the potential in rigid and improved housing demand. The sixth was to pursue coordinated progress in new types of urbanisation and all-around rural revitalisation, and to promote integrated urban-rural development. The seventh was to strengthen the implementation of regional strategies, and to boost regional development vitality. It urges the country to enhance the innovation capabilities and radiation-driven effect of regions with economic development advantages. The eighth was to cut carbon emissions, reduce pollution and pursue green growth in a concerted manner, while ramping up the comprehensive green transition in economic and social development. It urges the country to further deepen institutional reform to promote ecologically-minded civilisation. It also urges the country to create an ecosystem for the healthy development of green and low-carbon industries, and cultivate new growth drivers including green buildings. And, lastly, the ninth was to increase the protection and improvement of people’s wellbeing, and to give the people a growing sense of fulfilment, happiness and security. It urges the country to implement employment support plans for key sectors and industries, in both urban and rural communities, and for micro, small to medium-sized enterprises, as well as to facilitate employment among key groups. Given that China’s economy shows both resilience and great potential, its long-term economic outlook for prosperity has not changed and the potential for investment demand remains strong. As an example, the AI industry and new-type infrastructure construction will continue to receive greater support from government policies, as well as more attention from capital markets. With the advent of the big data era, along with improvements in algorithms and enhancements in the accuracy of unsupervised learning, as well as the rapid development of generative AI, AI enters a period of rapid growth, which will profoundly change the structure of traditional industries. It is here that the Fund will continue to seek out the best opportunities for investment.