Is China’s new premier Li Qiang good for the stock market? Analysts say they like his pro-growth, market-friendly approach

Name: China’s new premier Li Qiang outlines priorities in first press conference
Uploaded: 2023-03-14T23:30:13.000Z
Duration: 3 min 24 s
Description: China’s new premier Li Qiang outlines priorities in first press conference

Li Qiang, who has a pro-business reputation, stresses he will pursue stable growth through macro policies, domestic demand and innovation in his first media interaction

Li’s unwavering support for the private sector and prospect of further reforms offer some tailwind for struggling equities, traders and analysts say

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Chinese Premier Li Qiang speaks at a press conference after the closing ceremony of the National People’s Congress at the Great Hall of the People in Beijing, on Monday. Photo: AP Photo

Zhang Shidongin Shanghai

Published: 7:30am, 15 Mar 2023Updated: 9:46am, 15 Mar 2023

The pro-business and pragmatic tone struck by China’s new Premier Li Qiang may provide some impetus to the nation’s stock markets that are struggling for direction, as he makes steady growth a top priority, analysts say.

Li’s reaffirmation of Beijing’s “unwavering” support to the private sector and pledge of further opening-up to attract foreign investments will boost stocks by underpinning investors’ risk appetite in the long run, according to Shenwan Hongyuan Group. Meanwhile, Saxo Markets said that the general rhetoric delivered by the new premier is pro-growth and market-friendly, offering some tailwind to equities.

Traders and analysts have been analysing Li’s first media briefing on Monday, after he succeeded Li Keqiang as the premier, for clues on how his policy approach will sway the market and affect their portfolios. During the 1.5-hour long press conference, the former Shanghai Communist Party chief took 10 questions from the media, ranging from measures to help achieve the annual growth target to boosting employment and US-China decoupling.

“Attaching importance to the market and the private economy has always been a critical factor to support the risk appetite for the A-share market,” said Fu Jingtao, a strategist at Shenwan Hongyuan in Shanghai, referring to China’s yuan-traded stocks. “Attracting investments and opening-up, coupled with the digital economy, will probably be the focus of Premier Li’s work over a period of time.”

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China’s new premier Li Qiang outlines priorities in first press conference

The Shanghai Composite Index fell 0.7 per cent on Tuesday, giving up some of the 1.2 per cent gain the previous day. The market’s reaction was relatively better compared with the end of the Party congress in October, when stocks fell by more than 2 per cent after President Xi Jinping’s consolidation of power raised concerns about the growth outlook.

Li, 63, widely viewed as a Xi loyalist, has gained a pro-business reputation among entrepreneurs and foreign investors. Before being promoted as a member of the decision-making Politburo’s standing committee last year, Li spent two decades in various capacities in Zhejiang, Jiangsu and Shanghai, China’s most economically developed regions, acting as provincial governor and party boss.